Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Remember Me

Lost your password?

Register Now

Loading...
  • Capital Markets
  • Events
    • Mingtiandi 2025 Event Calendar
    • Mingtiandi APAC Residential Forum 2025
    • Mingtiandi Singapore Forum 2025
    • Mingtiandi APAC Logistics Forum 2025
    • Mingtiandi APAC Data Centre Forum 2025
    • Mingtiandi Tokyo Forum 2025
    • More Events
  • MTD TV
    • Residential
    • Logistics
    • Data Centre
    • Office
    • Singapore
    • Tokyo
    • Hong Kong
    • All Videos
    • Post-Event Stories
  • People
    • Industry Moves
    • MTD TV Speakers
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

Does Chongqing’s Political Purge Spell Trouble for Property Projects?

2012/05/05 by Michael Cole Leave a Comment

Bo Xilai bringing down Chongqing real estate valuesWhile Bo Xilai’s fall from power has already begun to fade from the world’s headlines, it may still be bringing some unhappy news for real estate investors in the city. It seems that as part of Bo’s program of raising the profile of this municipality in southwest China, the city government may have taken on a few too many megaprojects, and it is now being forced to hustle for new capital as state-sponsored sources of funding have dried up.

According to reports in the media, Chongqing officials have reached out to Hong Kong billionaire Li Ka-shing’s Cheung Kong and Hutchison Whampoa for investment.  These officials have also reportedly approached property developer Shui On Land regarding their potential interest in buying distressed real estate projects.

This urgent hunt for new sources of financial support seems to be motivated by high levels of public debt which were taken on to help build Bo’s pet projects.

While clear figures are not available as to how much money Chongqing’s government owes, 2010 records (which are the most recent available) show that 12 of the city government’s largest investment vehicles had racked up RMB 363 billion in debt. Beyond this amount directly owed by the government, there are much large amounts of liabilities that have been taken on by state-owned firms and developers belonging to the city, as well as debt from district governments, which would make the total city debt several times higher.

City Government in Trouble from Falling Land Sales

Previously, the Chongqing city government, like most cities in China could rely on income from land sales to fund the many new  highways, and bridges that it has been building, as well as a plan to build low cost housing for two million low-income residents in the coming years.

However, as demand for new homes has fallen, developers are showing less interest in buying more land, and are paying less for it when they are interested. And now that Chongqing’s government has fallen from favour, its unlikely that they will find other ready sources of government funding.

Foreign Investors Scared Off?

In addition to problems from falling land sales, according to a report in Reuters, foreign investors may also be avoiding Chongqing.

Reuters cites sources close to Ford Motor Co and Mazda Motor Corp (both major investors in the city’s auto industry), as being concerned about a possible longer-term impact from the Bo crisis on the city’s investment climate. Also, just as Bo Xilai was getting ready for his fall from grace this March, Samsung Electronics passed on the chance to set up a new falsh-memory factory in Chongqing — opting to build this major new facility in Xi’an.

 

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Research & Policy Tagged With: Bo Xilai, Cheung Kong Property Holdings, Chongqing, Li Ka-shing, Shui On Land

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

  • This field is for validation purposes and should be left unchanged.

MTD TV

Chedli Boujellabia, Managing Partner and CEO, Alyssa Partners
Neighbourhood Knowledge, Strong Ground Game Key to Japan Multi-Family Yields: MTD TV
PAG chairman Weijian Shan
PAG’s Weijian Shan Takes Audience Inside the ‘Money Machine’ at Hong Kong Forum

More MTD TV Videos>>

People in the News

Jungkhwan Kang Greystar
Asia Real Estate People in the News 2025-05-12
Jason Leong M&G
M&G Names Jason Leong to Lead Asia Fund as van den Berg Heads for the Exit
Alexander Knapp will join Norges on 16 June
Norges Hires Hines Exec Alexander Knapp as Global Real Estate Head
Karen Lee, Deputy CEO, ESR-Logos REIT
Asia Real Estate People in the News 2025-05-05

More Industry Professionals>>

Latest Stories

Jai Mirpuri, Head, Singapore Development & Thailand, ESR Group
ESR Breaks Ground on Singapore Shed With Japanese Partners Tokyu Land, Hulic
Eddie Yue HKMA
Analysts Expect Drop in Hong Kong’s Interbank Rate to Lift Market
pan gongsheng PBOC
China Cuts Housing Loan Rates to 30-Year Low to Boost Market

Sponsored Features

How to Create a Win-Win for Investors and Occupiers
Lingeage Logistics Cold Storage Complex
Mount Maunganui Cold Storage Facility for Sale
7 in 10 Senior Directors Confident in Data Centres, but Talent Shortage Will Widen

More Sponsored Features>>

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Mingtiandi 2025 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Memberships
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2025 China Advertising Media Ltd (Samoa). All rights reserved.

We use cookies in accordance with our Privacy policy to provide the best user experience on Mingtiandi and to safeguard user data. By continuing to browse you consent to the policy. AcceptRefuse