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SASAC tells 78 firms to plan property exit
By Cao Qian |
March 23, 2010, Tuesday
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Print Edition
Print Edition
SEVENTY-EIGHT companies, supervised by the State-owned Assets Supervision and Administration Commission, whose core business is not real estate should map out detailed plans to withdraw from the industry within 15 working days, the commission said in a statement posted yesterday on its Website.
The SASAC announced last Thursday that it was ordering all central government-controlled enterprises whose core business is not real estate to pull out of property development but it didn't issue a specific deadline. This lack of a deadline stirred up questions whether the initiative, aimed to rein in rising real estate prices across the country, could be carried out effectively.
"The latest requirement will allow the commission to better monitor the companies' withdrawal procedures and therefore help ensure effective implementation of the new measurement," said Xue Jianxiong, an analyst at China Real Estate Information Corp, a property information, consulting and online services provider.
Of the 127 companies supervised by the SASAC, 94 are involved in real estate and out of that only 16 are designated property developers.
Following rising industry complaints that private developers are being squeezed out of land auctions as well as growing public concerns over property prices, 78 firms controlled by the central government have been told to withdraw from property development after their current projects are completed.
While cash-flush government-backed enterprises have long been criticized for bidding up land prices to record levels and keeping smaller property firms out, analysts remained skeptical about the initiative's real impact on the country's overheated property market because they said the real reason behind high land prices is insufficient supply.
So far only one of the 78 firms has a timetable to exit the real estate market.
Wei Jiafu, president and CEO of China Ocean Shipping (Group) Company (COSCO), promised publicly last Friday that one of its subsidiaries, COSCO (Hong Kong) Group Ltd, will sell its 8 percent stake in Sino Ocean Land it indirectly owns within six months.
The SASAC announced last Thursday that it was ordering all central government-controlled enterprises whose core business is not real estate to pull out of property development but it didn't issue a specific deadline. This lack of a deadline stirred up questions whether the initiative, aimed to rein in rising real estate prices across the country, could be carried out effectively.
"The latest requirement will allow the commission to better monitor the companies' withdrawal procedures and therefore help ensure effective implementation of the new measurement," said Xue Jianxiong, an analyst at China Real Estate Information Corp, a property information, consulting and online services provider.
Of the 127 companies supervised by the SASAC, 94 are involved in real estate and out of that only 16 are designated property developers.
Following rising industry complaints that private developers are being squeezed out of land auctions as well as growing public concerns over property prices, 78 firms controlled by the central government have been told to withdraw from property development after their current projects are completed.
While cash-flush government-backed enterprises have long been criticized for bidding up land prices to record levels and keeping smaller property firms out, analysts remained skeptical about the initiative's real impact on the country's overheated property market because they said the real reason behind high land prices is insufficient supply.
So far only one of the 78 firms has a timetable to exit the real estate market.
Wei Jiafu, president and CEO of China Ocean Shipping (Group) Company (COSCO), promised publicly last Friday that one of its subsidiaries, COSCO (Hong Kong) Group Ltd, will sell its 8 percent stake in Sino Ocean Land it indirectly owns within six months.
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