China Vanke, the biggest mainland-listed property developer, said it is in talks with "a number of" overseas real estate players about establishing more joint ventures (JV) in a bid to widen its financing channels.

"We are now talking with a throng of overseas companies (over the formation of JVs)," Managing Director Yu Liang told reporters, without naming those enterprises. "They are from various countries and regions."

The Shenzhen-based developer is on the verge of having its first JV, which will be formed with Singapore's GIC. It is pending the approval from the Ministry of Commerce.

But Yu stressed that the seeking of co-operation with overseas developers was not solely for raising funds. Instead, it is aimed at long-term development.

"Co-operation deals spanning three to five years will not be considered," Yu said. "We pursue long-term partners, from whom Vanke could learn about advanced management and concepts."

It confessed that Vanke still has much to learn from the global players. "For example, property giants from our neighbor Hong Kong can teach us how to improve customer relations, construction quality, clarification of property rights and marketing," Yu said.

He also said Vanke hopes the JV should be operated on the basis of risk-sharing rather than a fixed return rate promise.

The developer said it has no capital problem and it has no concrete plans to make an initial public offering in Hong Kong. The Shenzhen-listed company has raised 1.99 billion yuan through convertible bonds last year.

The company also said it would focus on the Chinese property market in the coming 10 years, during which it will not venture into any overseas marketplaces or diversify into other sectors.

Established in 1984, the company had a diversified business scope covering manufacturing, trade and retail. It sold all of its non-real estate assets in 2001, and evolved into a property developer.

Yu said Vanke is confident of withstanding the central government's ongoing cooling-down measures on the property market, believing the moves would be conducive to the long-term development of the sector.

Beijing tightened credit lending, land approval and property transactions at the middle of last year to curb the spiralling property prices, which has led to sluggish housing sales in some areas.

"Vanke is smart enough to learn from the past," he said. "The measures do have some impact on us, but our growth is not hampered at all."

The company had a negative experience in 1993 and 1994 when a much fiercer macroeconomic control was launched by the government that forced Vanke to withdraw from a number of marketplaces, such as Central China's Wuhan and many cities in Northeast China.

"The experience taught us how to deal with a suddenly changed business environment," said Yu. "Since then, we learned to do things according to our strength and not to launch any hasty expansion."

Vanke posted a revenue of 4.33 billion yuan during the first half of the year, reflecting an increase of 75.6 percent. Its net profit saw a rapid jump of 152.6 percent to about 800 million yuan. The company's property has also widely gained a reputation among high-end buyers.

(China Daily August 24, 2005)