As private real estate companies are mired in debt, the CCP is accelerating the “state advancement and private sector retreat” in the real estate landscape. China Overseas Land, a large Chinese state-owned enterprise, ranks first in the land acquisition list. On October 24, China Overseas Real Estate acquired the “Big Mac” land parcel in Shanghai for 24 billion yuan. (Hector Retamal/AFP)
[The Epoch Times, November 06, 2023](Comprehensive report by Epoch Times Special Topic Department reporter Zhao Bin) As Evergrande and Country Garden exploded, and private real estate companies were mired in debt, the CCP’s central enterprises and state-owned enterprises occupied the top of the sales rankings , while aggressively acquiring land and seizing resources. Some analysts believe that in the context of widespread financing difficulties for private real estate companies, the Chinese Communist Party government is accelerating the “state advancement and private retreat” of the real estate industry, and China’s real estate power landscape is facing a reshuffle.
Agency data shows that the total sales volume of China’s top 100 houses from January to October was 4.56 trillion yuan (approximately US$624.7 billion), a decrease of 12.8% from the same period last year. The top five in the sales list are occupied by real estate companies with a background of central enterprises or state-owned enterprises of the Communist Party of China.
Number one on the sales list is Poly Development, an old state-owned enterprise. Contracted sales from January to October increased by 1.4% year-on-year to 368.21 billion yuan (approximately US$50.4 billion). This amount is 6.7 times the 54.6 billion yuan (about 7.5 billion U.S. dollars) of China Evergrande, which ranks 22nd.
Ranking third to fifth on the sales list are: China Overseas Real Estate, a year-on-year increase of 12.8%; China Resources Land, a year-on-year increase of 14.1%; China Merchants Shekou, a year-on-year increase of 9.6%. These are all established CCP state-owned enterprises that have emerged victorious after this round of real estate shocks.
Ranked second is Vanke, which has a state-owned background, with contracted sales of 311.61 billion yuan (approximately US$43.7 billion), a year-on-year decrease of 8.5%, and its performance is quite inferior to the other top four.
Looking at the sales rankings of real estate companies from January to October, the top 100 real estate companies are undergoing major changes. Private enterprise Country Garden fell out of the top five, ranking sixth, with contracted sales plummeting 49.3% year-on-year; another private enterprise Sunac China fell to 17th, contracted sales had the largest year-on-year decline among the top 50, reaching 50.5%, which can be called a cliff-like decline.
Meanwhile, some new faces are making leaps and bounds. The sales of Xiangyu Real Estate, a large Chinese state-owned enterprise, increased by 72.4% year-on-year, rising to 36th place in the sales rankings, jumping 37 places.
The sales volume of the above-mentioned real estate companies shows that the “state advancement and private sector retreat” has been more significant in seizing the land market. Land reserves are backup resources for real estate development and determine the company’s future market share. But now, due to financial strength and the declining trend of the real estate industry, large private enterprises in the past are no longer able or dare to acquire land. The CCP’s central enterprises and state-owned enterprises took advantage of the situation to seize high-quality land resources.
According to statistics, from January to the end of October, nearly 50% of the top 100 real estate companies have almost suspended land acquisition in 2023, and the sales performance of most of these real estate companies ranks behind the top 50.
Get landtop tenThe real estate companies are: China Overseas Real Estate, China Resources Land, Poly Development, Vanke, C&D Real Estate, Greentown China, China Merchants Shekou, Binjiang Group, China Railway Construction, and Yuexiu Real Estate. They are all enterprises with the background of central enterprises and state-owned enterprises of the Communist Party of China.
Data show that among the top 100 land acquisition amount, central enterprises and state-owned enterprises accounted for 66% of the land acquisition amount, while private enterprises accounted for only 22%. In terms of quantity, the largest number of local urban investment platforms on the list accounted for 40%. This is destined to dominate China’s future real estate market in the hands of these central and state-owned enterprises.
China Overseas Real Estate, a large state-owned enterprise of the Communist Party of China, ranks first in the land acquisition list, with a new land value of 106.39 billion yuan. It is currently the only real estate company to acquire land worth more than 100 billion yuan. On October 24, China Overseas Real Estate also acquired the “Big Mac” land parcel in Shanghai for 24 billion yuan.
Mike Sun, a North American investment consultant, told The Epoch Times, “Having identified the high-leverage dilemma of private real estate companies, central and state-owned enterprises have acquired land for two main purposes. First, to stabilize the basic market, because all land in China belongs to the CCP. Of course, the largest landowners do not want land to depreciate or be ignored. Second, big-name state-owned enterprises have suffered little loss in this brutal reshuffle of squeezing out bubbles and reducing leverage. They have taken advantage of the decline of private enterprises to accelerate the development of real estate. “The state advances and the people retreat” in the territory of power.”
Mike Sun believes that the economic development model led by real estate development and urbanization since 1998 has now come to an end, and the outcome of the real estate collapse cannot be changed.
China’s real estate prices have continued to fall since the second half of 2021, completely changing the previous market situation where house prices only rose but did not fall. China’s economy is also showing a downward trend, and the youth unemployment rate has hit new highs. The official data released in July rose to 21.3%. Some scholars pointed out that the actual figure may reach 46.5%. The explosion of Chinese real estate companies has begun to affect the financial sector, threatening to trigger a huge economic crisis.
Editor in charge: Lian Shuhua#
#real #estate #industry #undergoing #major #reshuffle #Chinas #top #real #estate #companies #undergone #major #Epoch #Times
2023-11-05 18:00:21
