SOEs property play

The craze of State-owned enterprises (SOEs) snapping up land at exorbitant prices in recent weeks is a cause for concern.

Besides long-time property players such as Greenland Group and Poly Real Estate, other gigantic SOEs such as Sinochem and China Electronics Corp have emerged as top bidders in recent land auctions in major Chinese cities. This is fueling a real estate bubble after the stagnation in the property market since the global financial crisis broke out in late 2007.

Private companies, which won most of the titles in 2007 for "land king" - the top bidder in high-profiled land auction - now feel they are no competitors for SOEs. As a result, they have to change strategy and focus on second- or third-tier cities.