With their flair for innovation, growing tech scenes, rising levels of foreign investment and fast changing skylines, cities across Asia are renowned for being some of the most dynamic in the world.
Many of these cities can be found in just two countries: India and China. These two nations are home to 15 of the top 20 cities undergoing the fastest economic growth and the most rapid urbanisation globally, according to JLL’s City Momentum Index.
“China and India are showing a lot of momentum,” says Jeremy Kelly, Director, Global Research for JLL. “Their cities are punching above their weight in terms of attracting capital, companies and people.”
Asian countries have battled socio-economic deprivation, environmental challenges and corruption as they sought to rise to Western standards. Ten years ago, a much broader spread of cities from around the world would have featured among the world’s most dynamic, Kelly says.
“But now we’re seeing a global shift of fast urban growth from the West to the East,” he says. Nairobi, the capital of Kenya, is the only city in JLL’s latest top 20 to sit outside Asia.
“And even in Nairobi there is a strong Asian influence, with significant amounts of investment from China focused mainly on infrastructure projects,” Kelly says.
Innovation drives India
India is positioning itself as the next global growth juggernaut, with a commitment to embracing technology and the entrepreneurial spirit helping the country move to the next stage. Cities like Bengaluru, Hyderabad, Delhi, Pune, Chennai and Kolkata are driving the country’s steady growth, attracting a growing share of foreign investment.
Structural reforms like the Real Estate Regulation and Development Act 2016 are “leading to greater transparency in the property sector – crucial in being able to attract capital from foreign investors,” says Kelly.
Indian cities are still facing a number of serious challenges. But the country has firmly established itself as a base for backend IT and other support functions of Fortune 500 companies, something that is expected to help continue drive growth.
Bengaluru, the most dynamic city in India, is the world’s fastest-changing urban economy, according to JLL’s City Momentum Index. The city has established a reputation worldwide for the design and development of technology and advanced electronics. And it’s attracting vibrant start-ups. Bengaluru is home to five of India’s eight unicorns – companies valued over US$1 billion.
Hyderabad is also home to successful start-ups. It has the fastest GDP per-capita growth rate of 8.7 in the Asia Pacific region, and third fastest in the world, according to Oxford Economics.
China’s urban growth continues
China’s urban growth story is also entering into a new phase. Although its economic growth is set to slow this year to 6.3 percent, the weakest in nearly 30 years according to Reuters, this growth forecast is still very strong compared to the rest of the world, and bodes well for China’s increasingly-dynamic cities. Nine of its major urban hubs – Xi’an, Guangzhou, Nanjing, Beijing, Shanghai, Chongqing, Hangzhou, Shenzhen and Chengdu – are all showing strong short-term momentum.
“We’re seeing a new system of Chinese cities evolving, where the focus is shifting from pure growth to a model based on smarter, more sustainable development,” Kelly says.
Take Xi’an, a western China city that has traditionally lagged its coastal peers. It is catching up on the back of its strategic position within China’s Belt and Road initiative, which is aiming to better connect China to Europe and Africa.
Guangzhou, having lost some ground in recent years to neighboring Shenzhen, is also regaining momentum and benefits from its location in the Greater Bay Area. And real estate markets in its heavyweight cities Shanghai and Beijing are becoming more transparent, a shift which will encourage long-term investment and sustainable growth.
“While there are a number of challenges that these cities need to address to achieve sustainable long-term momentum, their trajectory is clear, and investing in infrastructure, addressing environmental challenges and greater transparency are essential to facilitate this transition,” says Kelly.