China Blossoms: A Soaring Investment Market Results in Emerging Property Management Business. (Passport)

Article excerpt

Social wealth in China is accumulating rapidly thanks to continuous systematic reform and economic development. The social division of labor is more specific, and the money management concept has been changing from one of saving to investing.

Driving Forces

Three primary forces are advancing the rapid development of a real estate property management market.

First, there are a large number of bad debts from state-owned commercial banks. Four of the major state-owned banks in China have set up financial asset management companies: Great Wall, Orient, Huarong and Xinda. These companies are holding under-performing assets totaling 1.4 trillion RMB ($140 billion), including incomplete and delayed projects as well as large inventories of commercial space.

By July 2002, under-performing commercial space totaled 120 million square meters (12 million sq. ft.), half of which has remained unsold for more than one year and is worth 250 billion RMB ($25 billion).

Second, the Chinese real estate industry is growing quickly. In major cities, real estate represents more than 50 percent of the total investment in fixed assets. In 2002, 47 of the top 100 millionaires from Mainland China listed in Forbes were engaged in real estate. Currently, there are more than 20,000 development companies, 20,000 real estate agencies and brokers and more than 30,000 property management companies. Public companies switching to development have reached 348, about 29 percent of total public companies.

Third, investors from other industries, provinces and countries have poured into the Chinese real estate market. Most of the public companies that switched to real estate now need professional guidance.

Entry Permission

At present, all individuals and organizations with civil rights can enter the investment marker. …


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