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The significance and performance of infrastructure in China

Author

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  • Graeme Newell
  • Kwong Wing Chau
  • Siu Kei Wong

Abstract

Purpose - The significant economic growth and urbanisation of China in recent years has seen increased importance given to infrastructure development in China; this includes airports, toll roads, communications, ports, power plants and water. The purpose of this paper is to assess the significance and investment performance of infrastructure in China, the linkages to commercial property markets and the increasing future role of international private infrastructure investors in China. Design/methodology/approach - This paper analyses the performance of infrastructure in China over 1995‐2006. Using the Hong Kong‐listed China infrastructure companies, risk‐adjusted performance analysis is used to assess the added value of China infrastructure, with the portfolio diversification benefits of China infrastructure also assessed. Findings - The paper finds that China infrastructure has delivered significant and improved risk‐adjusted returns, but there is evidence of some recent loss of diversification benefits by China infrastructure in a portfolio. The strong linkage between effective infrastructure and effective commercial property markets is particularly important, as international investors seek to increase their exposure to China's infrastructure and commercial property markets to add value in their international investment portfolios. Originality/value - This is the first paper to rigorously assess the significance and performance of infrastructure in China. This risk‐adjusted analysis has enabled more informed and practical investment decision making by international investors regarding the significance and role of China infrastructure and the associated strong linkage to the commercial property markets in China. This will take on increased importance as international investors increase the significance of both China infrastructure and China commercial property in their portfolios.

Suggested Citation

  • Graeme Newell & Kwong Wing Chau & Siu Kei Wong, 2009. "The significance and performance of infrastructure in China," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 27(2), pages 180-202, March.
    • Handle: RePEc:eme:jpifpp:v:27:y:2009:i:2:p:180-202
    DOI: 10.1108/14635780910937863
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    Citations

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    Cited by:

    1. Surbhi Gupta & Anil Kumar Sharma, 2022. "Evolution of infrastructure as an asset class: a systematic literature review and thematic analysis," Journal of Asset Management, Palgrave Macmillan, vol. 23(3), pages 173-200, May.
    2. Qile Tan & William Dimovski & Victor Fang, 2015. "The Underpricing of Infrastructure IPOs: Evidence from China," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-31, December.
    3. Muhammad Jufri Marzuki & Graeme Newell, 2020. "The investment opportunities in the innovation-led listed satellite and telecommunication infrastructure sectors," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 39(3), pages 223-238, April.
    4. Muhammad Jufri Marzuki & Graeme Newell, 2020. "A global investment opportunity in non-listed infrastructure for institutional investors," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 39(3), pages 239-255, May.
    5. Wouter Thierie & Lieven Moor, 2016. "The characteristics of infrastructure as an investment class," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(3), pages 277-297, August.
    6. Frédéric Blanc-Brude & Timothy Whittaker & Simon Wilde, 2017. "Searching for a listed infrastructure asset class using mean–variance spanning," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 31(2), pages 137-179, May.
    7. Graeme Newell, 2021. "Future research opportunities for Asian real estate," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 25(2), pages 272-290, April.
    8. Jia Li & Rachel Tochen & Yaning Dong & Zhuoran Ren, 2022. "Debt-Driven Property Boom, Land-Based Financing and Trends of Housing Financialization: Evidence from China," Land, MDPI, vol. 11(11), pages 1-23, November.
    9. Yao Yang, 2017. "Towards a New Digital Era: Observing Local E-Government Services Adoption in a Chinese Municipality," Future Internet, MDPI, vol. 9(3), pages 1-17, September.
    10. Zhang, Yuehua & Rao, Xudong & Wang, H. Holly, 2019. "Organization, technology and management innovations through acquisition in China’s pork value chains: The case of the Smithfield acquisition by Shuanghui," Food Policy, Elsevier, vol. 83(C), pages 337-345.

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