State-run companies skirt real estate ban

0 CommentsPrint E-mail Global Times, November 19, 2010
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Seven months after 78 enterprises controlled by the central government were banned from the real estate industry, some are trying to find a way to stay in the sector by entering small cities and building low-rent housing, a report by China Business News said Thursday.

On March 18, those 78 companies whose core business wasn't in the housing industry were ordered to retreat from the sector by the State-owned Assets Supervision and Administration Commission of the State Council - the controlling body of 111 State-owned enterprises directly owned by the central government.

A senior official at one of the 78 companies was quoted anonymously by China Business News as saying, "Our major concern is profit-making, rather than quitting the housing market."

His company, which he did not want to identify, is trying to win low-rent housing projects in small cities in order to maintain commodity housing projects, according to the report.

In August, a housing arm of An Steel gained construction and design licenses from the Ministry of Housing and Urban-Rural Development.

Some of the 78 companies, including a steel maker, power grid runner and nuclear power plant builder, had smashed price records in land auctions earlier this year in major cities such as Beijing, helping fuel soaring housing prices, as well as public outcry.

They were required to shed their housing equity within half a year, in an effort to cool the rocketing land and housing prices.

Their central government-owned background makes obtaining loans from State-owned banks much easier for these companies, said Liu Yuan, an analyst with Shanghai-based Centaline China Property Research.

Repeated calls to State-owned Assets Supervision and Administration Commission were not returned Thursday.

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