RMB 42,359 in 2019 while per capita consumption expenditure of urban residents reached RMB 28,063 in 2019. Responding to the increased demand and purchasing power, the investment in the real estate market has increased. The table below sets out income and expenditure of urban residents of the PRC for the years indicated:

<table><tr><td></td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2014-2019
CAGR</td></tr><tr><td>Per caifpta disbposale income o urban
residents (RMB) ...................</td><td>28,844</td><td>31,195</td><td>33,616</td><td>36,396</td><td>39,251</td><td>42,359</td><td>8.0%</td></tr><tr><td>Per caipta consumifpton exdipenture o
urban residents (RMB) ..............</td><td>19,968</td><td>21,392</td><td>23,079</td><td>24,445</td><td>26,112</td><td>28,063</td><td>7.0%</td></tr></table>

Sources: National Bureau of Statistics of China

# Historical Price Trend of Production Factor

# Land Cost

Land cost generally accounts for a significant proportion of a property developer’s overall costs. According to the Ministry of Natural Resources of the PRC, the average residential land cost of the 105 monitored cities has rose from RMB 5,277 per sq.m. in 2014 to RMB 7,434 per sq.m. in 2019, representing a CAGR of 7.1%. The table below sets out the land cost in the PRC for the years indicated:

<table><tr><td></td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2014-2019
CAGR</td></tr><tr><td>Average residential land cost of 105 monitored
cities (RMBp er sq.m.) ....................</td><td>5,277</td><td>5,484</td><td>5,918</td><td>6,522</td><td> 7,080*</td><td> 7,434*</td><td>7.1%</td></tr><tr><td>Average commercial land cost of 105 monitored
cities (RMBp er sq.m.) ....................</td><td>6,552</td><td>6,729</td><td>6,937</td><td>7,251</td><td> 7,600*</td><td>7,821*</td><td>3.6%</td></tr></table>

Note:

\* Sanya has been included in the national monitoring scope in 2018. A total of 106 cities are therefore monitored. Source: Ministry of Natural Resources of the PRC

# Construction Materials

The prices of steel and cement decreased in 2014-2015, due to oversupply. The prices of steel and cement generally increased from 2015 to 2019, mainly due to regulations that shut down some small-to-medium sized steel and cement companies for environmental purposes, resulting in the tightening of supply of steel and cement in the market. However, the prices of steel fluctuated as the regulation started to loosen. The table below sets out selected statistics of construction materials of China for the years indicated:

<table><tr><td></td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2014-2019
CAGR</td></tr><tr><td>Steel Price Index (Base year 1994 = 100) ........</td><td>83.1</td><td>56.4</td><td>99.5</td><td>121.8</td><td>107.1</td><td>106.1</td><td>5.1%</td></tr><tr><td>Cement Price Index (RMBp er ton) ............</td><td>308.4</td><td>247.4</td><td>318.7</td><td>414.9</td><td>449.0</td><td>471.0</td><td>8.8%</td></tr></table>

Source: China Iron and Steel Association and China Cement Association

# Labor Costs

Labor cost is also an important factor for property developers. According to the National Bureau of Statistics, the average wage of workers in the construction industry and the real estate

industry in 2019 was RMB 65,508 and RMB 80,157 per year, respectively. The average wage of workers in the construction and real estate industries generally increased from 2014 to 2019 and is expected to continue to increase in the near future. The table below sets out labor costs of China for the years indicated:

<table><tr><td></td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2014-2019
CAGR</td></tr><tr><td>Average wage of workers in construction
industry (RMB) ....................</td><td>45,804</td><td>48,886</td><td>52,082</td><td>55,568</td><td>60,501</td><td>65,508</td><td>7.4%</td></tr><tr><td>Average wage of workers in real estate
industry (RMB) ....................</td><td>55,568</td><td>60,244</td><td>65,497</td><td>69,277</td><td>75,281</td><td>80,157</td><td>7.6%</td></tr></table>

Source: National Bureau of Statistics

# Recent Development of the Residential Property Market in the PRC

The PRC government plays a key role in the real estate market and has promulgated various control measures to avoid over-heating the property sector in recent years. The PRC government has formulated a number of measures which include various monetary, fiscal, land, regulatory and financing policies aimed at stabilizing the real estate market. Such legislative measures include but not limited to implementing regulations and policies on down payments of housing loans, restrictive conditions for home buyers, prices of residential properties and land supply. The PRC government emphasized that China will step up its efforts to establish a long-term mechanism for a healthy development of the real estate market and will not use the real estate market as an avenue to provide short-term stimulus for the economy.

Under guidance from the central government, various local governments in the PRC also promulgated regulations and measures to stabilize the real estate markets.

# REAL ESTATE MARKET OF SELECTED CITIES IN THE PRC

# The Western Taiwan Strait Economic Region

# Xiamen

Xiamen is located along the 21st Century Maritime Silk Road, which is the sea route part of the China’s “Belt and Road Initiative.” Xiamen’s economy grew steadily in recent years. The nominal GDP increased from RMB 334 billion in 2014 to RMB 600 billion in 2019, representing a CAGR of approximately 12.4%. The fixed asset investment witnessed a continuous increase from approximately RMB 156 billion in 2014 to RMB 286 billion in 2019, representing a CAGR of 12.8%. The table below sets out selected economic indicators of Xiamen the years indicated:

<table><tr><td></td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2014-2019
CAGR</td></tr><tr><td>Nominal GDP (RMBb illion) . . . . . . . . . . . .</td><td>334</td><td>353</td><td>386</td><td>435</td><td>479</td><td>600</td><td>12.4%</td></tr><tr><td>Real GDP growth rate (%) . . . . . . . . . . . . . .</td><td>9.2</td><td>7.1</td><td>7.9</td><td>7.6</td><td>7.7</td><td>7.9</td><td> N/A</td></tr><tr><td>Fixed asset investment (RMBb illion) . . . . .</td><td>156</td><td>189</td><td>216</td><td>238</td><td>262*</td><td> 286*</td><td>12.8%</td></tr><tr><td>Population (million) . . . . . . . . . . . . . . . . . . .</td><td>3.8</td><td>3.9</td><td>3.9</td><td>4.0</td><td>4.1</td><td>4.3</td><td>2.4%</td></tr><tr><td>Urbanization rate (%) ..................</td><td>88.8</td><td>88.9</td><td>89.0</td><td>89.1</td><td>89.1</td><td>89.2</td><td> N/A</td></tr><tr><td>Per caifpta disbposale income o urban
households (RMB) ..................</td><td>39,625</td><td>42,607</td><td>46,254</td><td>50,019</td><td>54,401</td><td>59,018</td><td>8.3%</td></tr></table>

Note:

\* estimated by the published data from the Statistics Bulletin of Xiamen in 2018 and 2019, stating that fixed asset investment received a 10.1% and 9.0% year-to-year growth in 2018 and 2019

Source: Xiamen Municipal Bureau of Statistics