Zhou Xiaochuan

Zhou Xiaochuan, governor of China’s central bank, hinted at a possible stimulus package to cushion the impact of the global financial crisis on the economy.

Although he believes investment and consumption are proving resilient, Zhou told a Hong Kong television station that it may be necessary ‘to increase domestic demand further.’ Whilst not spefically addressing property the flow-on effect is obvious and needed.

The government has already cut interest rates twice in recent weeks.

China’s third-quarter economic data, due for release on Monday, are expected to show that GDP growth dropped below 10% from 10.1% in the second quarter and 11.9% for 2007 as a whole.

Source: Reuters

The problems of housing prices

For four days, the Chinese Communist Party elite has been meeting behind closed doors in Beijing to thrash out what new policies should govern the fastest-growing economy in the world, and how to prevent the global financial crisis from damaging China’s continued prosperity as much as that of the West.

The meeting is taking place just as ominous signs are emerging that the financial meltdown in the US is having an impact on China.

The property boom of the last few years has come to an abrupt halt.

High prices and a surplus of new homes meant that in September, traditionally the best month for house sales, there were the lowest number of transactions so far this year.

Developers in the worst-hit cities, Beijing, Shanghai and Shenzhen, have been slashing prices by up to 30% in an effort to attract buyers.

‘I think house prices will fall by another 10 to 15% by the end of the year,’ said Yang Shaofeng, the general manager of the Beijing Lianda Sifang Real Estate Co and the author of one of China’s most widely-read property blogs.

‘Since 2006 a lot of money has gone into the housing market and the stock market, and that’s created a bubble. Now, the bubble is bursting.’

Read the full, detailed, depressing and biased report HERE.
Source: Daily Telegraph

Yvonne Hue

Plunging property and share prices knocked a third off the average wealth of China’s billionaires in the first fall for seven years.

Zhang Yin, director of Nine Dragons Paper lost $8.4 billion after shares of her scrap paper company dropped by 86%.

The 50 richest people in China were worth $2.43 billion on average, down from $3.63 billion in 2007, according to an annual list from Hurun.

Amongst the big losers was, seen here, the delectable Yvonne Xue, 44, board chairman general manager of Shanghai Si Tong Cable Industry and vice board chairman of Shanghai Huiyang Industry.

Gome Chief Executive Officer Huang Guangyu [left] has topped the rich topped the list three times in the last five years Photo: REUTERS

Zhang Yin, director of Nine Dragons Paper lost $8.4 billion after shares of her scrap paper company dropped by 86% Photo: GETTY

The 50 richest people in China were worth $2.43 billion on average, down from $3.63 billion in 2007.

Back in first place, with a personal fortune of USD6.3 billion, was 39-year-old Huang Guangyu, nicknamed the Price Butcher because of the discounts available at Gome, his electrical retail empire. Mr Huang has topped the list three times in the last five years.

His elevation knocked Yang Huiyan, the 27-year-old heiress who was given a controlling stake in Country Garden, an enormous property developer, into third place.

Miss Yang saw her personal wealth plummet from $17.5billion to $4.9 billion as the share price of Country Garden nose-dived and jitters derailed the Chinese property boom.

Zhang Yin, the chairwoman of Nine Dragons Paper, who was the first woman to top the rich list in 2006, lost $8.4 billion after shares of her scrap paper company dropped by 86 per cent.

Two more property tycoons also suffered badly. Xu Rongmao, chairman of Shimao, lost $4.4 billion and Zhang Li, co-chairman of Guangzhou R&F properties, lost $3.6 billion.

China was home to 101 people with $1 billion or more of personal wealth, declining from 106 last year.

Sluggish sales in real estate

After months of steely resistance, Chinese property developers have finally accepted the inevitable and are cutting prices to boost falling sales.

Whether the move succeeds in putting a floor under the market will help determine the fate of the economy over the coming year.

Real estate accounts for 24% of China’s fixed-asset investment and is crucial not only for domestic steel makers but also for global producers of myriad construction inputs such as aluminum and copper.

Jonathan Anderson, a UBS economist in Hong Kong said he expects property and construction activity to stabilize and rebound in the first half of next year.

But many developers, harried by declining sales and financing constraints, are less optimistic.

Prices in major cities such as Shenzhen have plunged by up to 40%.

Average property price inflation in 70 large Chinese cities slowed to 5.3% in the year to August from 11.3% in the year to January.

For some developers, selling unsold homes at a discount is their last hope to survive.
More on this HERE.
Source: Reuters

Zhang Xin

Zhang Xin, chief executive, Soho China, one of the mainland’s biggest commercial property developers, said she expects Beijing to announce further measures to loosen its tight control of the property market to avoid a slump.

She said, ‘The property market is very important to China. It accounts for 10% of GDP and affects many other industries such as banks. I don’t think the government will want to see a hard landing.’

China’s property market has seen a significant slowdown this year after the government put in a series of regulations, such as a restriction on mortgage lending, to take the steam out of the sector.

The volume of property transaction fell 36% in Beijing in August, according to Soho China, and dropped by an even bigger degree in Shanghai.

In a move to boost the domestic economy and the property sector, China’s central bank this week cut the country’s benchmark interest rate for the first time in six years.

Zhang Xin said she expected China’s regulators to reveal more policies to rebuild confidence in the property market amid increasing signs of disastisfaction from real estate investors.
Source: Financial Times