From Chinese Press

Realty market has to change

(China Daily)
Updated: 2010-09-28 08:06

Despite its brightening prospects China's leading sportswear brand, Li Ning Co Ltd, also plans to diversify into the realty sector. This shows the real estate has become the most sought after sector, says an article in China Youth Daily. Excerpts:

Although the central government has tightened macro-control over the housing market, enterprises from other sectors have not stopped entering the real estate industry. In 2009, at least 30 companies underwent "reconstruction" to diversify into the real estate sector. According to a media survey, representatives of about 220 of the 500 enterprises interviewed have set their eyes on the real estate sector, although they do not necessarily belong to the sector. The driving force behind all this is sheer profit.

The cause of the realty fever lies in the realtor-official nexus and the incomparable advantages of the industry. The real estate industry, in many places, makes the major contribution to the local government's fiscal revenue and propels local GDP growth. Thus it is protected by many local governments.

Though irregular and unhealthy, the real estate market has become one of the greatest draws for capital investment. It is thus restraining the development of other industries. The central government has to change the situation sooner than later to facilitate fair market competition.

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(China Daily 09/28/2010 page9)