China’s contribution to U.S. and the world economy
For years, when it came to China and the U.S. real estate things were very relatively straightforward – American business went to China to find cheap labor, while Chinese companies, investors and private citizens were increasingly pouring their money into American real estate. It was just a matter of time until things started changing and what I saw at the Waldorf Astoria this past Monday might be the beginning of the next phase.
Earlier this week at a formal and an extremely very well organized event at the Waldorf Astoria in Manhattan, Xinyuan unveiled their block chain platform, named Fangyixin. Among the invitees were New York real estate developers, builders as well as members of the Chinese media and business circles here in New York. The entire executive team from Xinyuan, including Chairman Zhang, President Edward Cui and the head of their international operations, John Liang, were in attendance, which shows how much Xinyuan cares about this project. The tech/data side was represented by Xinyuan’s chief data scientist and the data scientist from IBM China. IBM is Xinyuan’s partner in this project. As expected, China’s consul in New York was also there and he was the one who made the opening remarks.
The consul started by saying that the Chinese government sees this project as a great contribution of Chinese people and companies to the American and world economy.
He acknowledged that in the past the U.S. contributed much to China in terms of economic and scientific development and emphasized that now it it is time for China, its companies and Chinese entrepreneurs to return the favor by bringing innovation back to the U.S. Chinese government officials view this as a great step forward in the bilateral relations between the two countries. Of course, they are very proud of this moment. It is also a very healthy indication that the technology scene in China is maturing.
The consul finished by stressing yet again that the goal of the People’s Republic of China remains turning China into a technology superpower, while working in consort with the rest of the world. It expresses China’s desire to lead the world with the U.S. in terms of technological and scientific progress.
Blockchain and digitalization of real estate
Xinyuan’s Chairman, Mr. Zhang, was the next speaker. He spoke in Mandarin and his speech was broadcast in English via the headsets we received at the front. He started by giving a brief background on the relationship between Xinyuan and IBM. The two companies have developed this project together over the course of the last year.
He then spoke about complexity of real estate deals and how streamlining transactions is key. Block chain provides the information and transparency that make it more efficient. Blockchain will also be very effective for B2B transactions. Xinyuan believes that their platform could be a true disruptor in the traditional practice of real estate, whereby in the future home buyers and investors will not only be able to buy but also finance their purchase.
In terms of the partnership between Xinyuan and IBM, IBM provides the infrastructure and Xinyuan provides the data. Xinyuan wants to build the future infrastructure of fintech. They do understand that this is going to be a collaborative effort by all industry players and they are looking forward to building new relationships with their American counterparts in attempt to modernize real estate markets. The platform will go live in China next month, Aug 2016.
After that, we moved into the Q&A part of the presentation with Mr. Cui and Mr. Liang taking questions from the crowd. Asked about their current projects, Mr. Cui confirmed work on Xinyuan’s new development site at 10th Ave and 45th street, which will eventually deliver 88 luxury units. He reiterated the idea that digitalization of real estate is imperative and block chain is in the center of it.
China’s incresingly hot tech scene
Two keys things that I personally took away from this event. First, it is exciting to some, and probably quite unsettling for others, to see how technology continues to evolve and change the landscape of commercial real estate in the the city that sets standard for the rest of the world. It might be true that this is just the beginning, but it is exciting nonetheless. Second, the fact that it is a Chinese company that asks to be at the forefront of this change is not only a compliment to the company itself but is yet another sign of how hot Chinese tech scene has been and will continue to be. Foreign investors will be wise to take note. If you happen to be one of them and would like to invest in early stage Chinese technology companies, I will be happy to put you in touch with one of the most reliable and successful VC firms in China.
Lastly, big compliments to the organizers, including the staff at the Waldorf. The entire event was conducted in both languages with both English and Mandarin simultaneous interpretations available to the attendees. Everything from the beginning to the end was perfectly done.