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Business

Shanghai's commuter reach grows with new rail links

Planned metro expansions to Suzhou likely to boost prices, incomes along the way

Locals enjoy shopping at the commercial complex near Huaqiao station.

SHANGHAI -- Improved transport links with surrounding cities are causing the Shanghai metropolitan area to swell, boosting property prices, incomes and business opportunities in the new areas it engulfs.

A plan to extend a Shanghai metro line by the 2020s will enable people to zip nearly all the way between central Shanghai and the city of Suzhou, Jiangsu Province.

Businesses and others in areas along the expanded route are hoping to cash in on the increased flow of traffic. Companies that currently focus the bulk of their marketing on central Shanghai may be encouraged to expand their geographic reach.

One January afternoon just before the start of the Lunar New Year, a commercial complex near the Huaqiao subway station was packed with local shoppers. The station, an hour's ride from central Shanghai, is currently the last stop on the line.

All the tenants at the complex -- from a burger shop to fast fashion clothing stores to a natural cosmetics brand -- are Chinese. And the streets near the station are lined with shops representing such Chinese smartphone makers as Vivo and Oppo.

A several subway lines connect Shanghai with Jiangsu stations.

The area belongs to the city of Kunshan, Jiangsu Province, and is something of a suburban no-man's land between the big cities of Shanghai and Suzhou. The addition of the train station has brought changes to Kunshan. Average per capita disposable incomes there came to 46,000 yuan ($6,697) in 2016, 2.4 times higher than a decade earlier and edging closer to the 54,000 yuan for Shanghai. 

The population of Kunshan has grown to 1.7 million and continues to rise.

A little to the south of the planned rail link running between Shanghai and Suzhou via Huaqiao is another planned train link connecting the cities.

With these new routes, in addition to existing highway and rail links, Suzhou will soon be within commuting distance to Shanghai. Large property projects are already underway in the expectation of surging demand.

At one commercial and residential project currently underway between the cities, an apartment unit is being priced at 12,000 yuan per square meter -- far less than the 80,000 yuan to 100,000 yuan for used condos in central Shanghai.

At a large apartment building near Huaqiao station, a 104-sq.-meter secondhand apartment was going for 1.7 million yuan, putting it within the reach of even households with annual incomes of just several tens of thousands of yuan. As urbanization takes greater hold, those prices will likely only continue to go up.

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