China gives 78 state firms deadline to exit property sector

Discussion in 'Wall St. News' started by ASusilovic, Mar 23, 2010.

  1. BEIJING (Reuters) - China has ordered 78 state companies whose core business is not property to submit plans to divest from the sector within 15 working days, state media reported on Tuesday.

    The order, from the State-owned Assets Supervision and Administration Commission (SASAC), is part of a broader government campaign to rein in fast-rising housing and land prices.

    State-owned enterprises from arms manufacturers to tobacco producers have expanded into property development in recent years, attracted by outsized profits but bidding up prices in the process. Last week, two state companies won land auctions in Beijing that smashed price records, generating a public outcry.

    SASAC Chairman Li Rongrong had instructed state companies to formulate exit strategies within 15 working days from March 19, the Securities Times reported.

    China would also conduct a national investigation from March to July to check whether property developers were hoarding land or illegally building villas, the newspaper quoted Yun Xiaosu, vice-minister of land and resources, as saying.

    Yun said at least 70 percent of China's land supply coming onto the market this year must be used to build affordable housing and small residential units.

    Property prices rose a nationwide average of 10.7 percent in the year to February, although price inflation has been much more extreme in high-end housing. Beijing has tweaked taxes and stiffened mortgage rules in recent months to slow the market.

    The emporors of China have spoken ! Huh !