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News, cover, Issue 462, March 29, 2010 Translated by Liu Peng Original article: [ Chinese ] Seventy-eight central-owned enterprises (COEs), whose core businessis not real estate, have been ordered to formulate a plan for theirwithdrawal from the real estate market; however, doubts remain asto whether the withdrawal order can be effectively implemented. At a meeting held on March 19, Li Rongrong, director of theState-owned Assets Supervision and Administration Commission(SASAC), the agency charged with managing the non-financial assetsunder the control of the country's central government, announcedthat aside from the 16 centrally-owned enterprises, who focus onproperty development, the remaining 78 COEs who have invested inreal estate will be required to formulate a plan for withdrawalfrom the market within 15 days. That means that these companies have a deadline of April 9th, andonly 9 days remain for these 78 COEs to hammer out their exitstrategy. A source from the SASAC said, "All we've done is announce the needfor an action plan for COEs to exit the market, specific ideas onhow to organize their withdrawal are still unclear." An industry player interviewed by the EO said given that thecommission already stipulated that these 78 COEs are permitted tocomplete developments that are already under way, it's hard tounderstand how the new exit order will be implemented. With the question of how COEs planned to respond to the SASAC'swithdrawal order in mind, the EO approached seven COEs includingChina Energy Conservation Investment Corporation, China RailwayMaterials Commercial Corporation, China Hengtian Group Corporation,Aviation Industry Corporation of China, Shandong Luneng GroupCorporation, China North Industries Group Corporation, and ChinaNational Petroleum Corporation. However, they either said thattheir land was alloted to them by the government and thus the orderdid not apply to them, or gave unclear replies. In an interview with the EO, a person in charge of the generaloffice of China Xinxing Real Estate Corporation, a subsidiary ofthe centrally-owned China Xinxing Pipe Group, said he had seen theSASAC's order to draw up an exit plan from the real estate marketon its website, but had yet to receive orders from the parent firm.He continued to say his company didn't purchase any land at publicauction. In fact, it's very difficult for a COE's headquarters to master thenumber of idle land its subsidiaries manage. Take the China National Chemical Corporation (ChemChina) forexample, people familiar with the matter told the EO, ChemChina setup an asset management company to take full charge of thedevelopment of land resources originally managed by its daughterfirms at the end of 2009. However, most of its daughter firmsfailed to obey the order and, up until now, only two land plotshave been handed over to the asset management company. Wang Zhigang, a researcher with the SASAC raised his concern, "Whatif these COES involved in the real estate market are already listedon the stock exchange?" He stated, "If they are listed companies, their investments shouldbe decided by their board of directors, so the decision to retreatfrom the real estate market should also be made by the board andshould not damage the interests of investors." Statistics provided by SASAC revealed that the property assets ofthe 16 COEs whose main business is related to property development,accounted for 85 percent of the total value of all property assetsowned by COEs in 2008. Of the three companies that broke land sale records at publicauctions held after this years two sessions, only one - ChinaNorth Industries Group Corporation - is officially under thecontrol of SASAC. The majority shareholders of the other two,Sino-Ocean Land and Citic Real Estate Company, are China LifeInsurance Company and CITIC Group respectively. A manager at the CITIC Real Estate said the SASAC's withdrawalorder has no bearing on their company. We will have to wait until April 9th to see what kind of exitstrategies these 78 COEs will submit to the SASAC. The e-commerce company in China offers quality products such as China Energy Silicone Bracelet , China Power Balance Silicone Necklace, and more. For more , please visit Energy Silicone Bracelet today!
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