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Operations and market reviewChinaTo be completed in 2007,The Waterfront in Chengdu isclose to 100% sold.The Waterfront, ChengduMarket reviewEconomySustainable economic growth driven by increasingconsumptionChina achieved a strong Gross Domestic Product (GDP)growth of 10.7% in 2006. The anti-speculation measureshave effectively curbed overheating investment, while theslowdown in fixed asset investments was offset by robustdomestic consumption. Exports surged 27.2% while percapita disposable income in urban and rural areas increased10.4% and 7.4% respectively.Growth in China is likely to be sustained by surgingconsumption, strong exports, rising purchasing powerand healthy foreign direct investment (FDI).Shanghai to become an international financialand logistics hubShanghai achieved GDP growth of 12% in 2006, boostedby the finance, logistics and IT sectors. The financial and ITsectors grew 17.6% and 16.5% respectively. Shanghai isalso now ranked the first shipping hub in the world in termsof tonnage.Shanghai aims to become an international financial centreby 2010. Strong domestic consumption and fast expansionof the city’s infrastructure before the World Expo 2010 willalso support Shanghai’s growth in the next few years.Beijing to grow beyond 2008 OlympicsBeijing’s economy grew 12% in 2006, fuelled by growth inthe telecommunications and financial sectors. FDI surged29.1%, mainly from leasing and business services, realestate, retail and wholesale sectors. Domestic consumptionincreased 12.6% while urban per capita disposable incomeincreased 12.2%.Beijing will see strong economic growth in the next fewyears as the 2008 Olympics will continue to boost itstelecommunications, infrastructure and services sectors.Meanwhile, the construction of inter-city rail network andthe development of Huan Bo Hai Economic Rim, whichcomprises Beijing, Tianjin, Hebei Province, ShandongProvince and Liaoning Province, will also fuel thecity’s economy.Foreign investment to boost Chengdu’s economyChengdu registered a GDP growth of 13.8% in 2006,the highest in 10 years. Growth was driven by exportsand investments. Foreign trade surged 53.3% and FDIincreased 36.6%. Consumption rose 14.9% while urban percapita disposable income increased 12.6%.128Operations and market reviewChinaKeppel Land LimitedReport to Shareholders 2006