The integrated and open real estate market facilitated by Pan Pearl River “9 plus 2” model in 2005

Source: Xin Hua Net
  

It was reported by Xin Hua Web on December 31^st that the Pan Pearl River regional cooperation of real estate industry became the hot spot in 2005. In early December, the regional real estate exchanging exhibition of Pan Pearl River which lasted for 3 days was hold in Guangzhou, which made the regional cooperation trend come into climax.

In Guangzhou Flour City Exhibition Center, there were more than 1000 persons coming from Fujian Province, Jiangxi Province, Hunan Province, Guangdong province and other 7 provinces and districts to attend this pageant of real estate industry. By using this business platform, 318 enterprises from 89 cities in Pan Pear River Delta showed their most excellent works to the world. Most of the real estate practitioners believed that under the cooperation frame “9 plus 2” project, real estate industry in Pan Pear River Delta would have broader market space.

The boundary of real estate industry of Pan Pear River Delta was destroyed.

In June 20^th this year, the first real estate cooperation and development forum of Pan Pearl River under the frame of “9 plus 2” was held, which was remarked as the beginning of large scale crossing region real estate cooperation dominated by the government.

During that forum, the principals coming from different provinces talked about the participation opportunity of this Pan Pearl River regional economic circle. The principal of construction department of Hunan Province suggested that it was necessary that the boundaries of real estate market between different regions should be eliminated. And the real estate policy systems should be connected organically. A platform which was helpful for the floating of capital, information and human resources should be established and a open real estate market should be constructed too.

Regional cooperation within these areas including the Changjiang River Delta Economic Circle, Bohai Bay Economic Circle, and Six Provinces Economic Circle in Central China and so on is a hot topic in China. When the open real estate market established in the frame of Pan Pearl River region becomes mature, broad attention and identification are brought out.

Pan Pearl River Regional Cooperation is the largest regional cooperation in China up to now. According to the statistic data, the 9 provinces in Pan Pearl River cover an area of 2 million square kilometers. Its gross domestic product reaches 3884.63 billion yuan, which occupied 33.3% of the total national product. When two special administrative zones are considered, Pan Pearl River region plays a more important role in China.

The vice president of Guangdong Construction Department Mr. Liu Jinhong points out the real estate industry cooperation in the frame of Pan Pearl River region will create a broad market space. The cooperation mechanism initiates a new regional cooperation model in China. Under the frame of “9 plus 2”, this model will bring up open and expedite financing channel, favorable investment policy and convenient transportation condition, which will contributes to the development of real estate services and its upriver and downriver industries.

The developers long for the acceleration of capital flowage 

Compared with the government, the developers show more rationality. The capital flowage is the focus of developers. Although the control of real estate industry is strengthened by government, the investment in real estate industry in the junior area is seriously expected by the developers.

An example can demonstrate this fact. According to the plan, the urbanization of Hunan Province will reach 55% before year 2020, which means that there will be 970 thousand newly increased population in Hunan Province. Now, the demand of real estate is still in a booming. Many powerful developers form Guangdong Province come here and medium and high-class commodity houses will be a hot orientation for investment. The president of Huansheng Corporation in Hunan Mr. Luo Jingsong pays attention to the cooperation of real estate industry. He said the government and market belong to two lines. The aim of cooperation between governments is to get rid of policy barriers of bilateral and multilateral cooperation while the aim of cooperation between enterprises is to shorten the distance between capital and project.

The vice manager of a real estate company in Guiyang Province Mr. Dong Tiejun said the top 20 real estate enterprises of Guiyang City were local companies and many enterprises from other places didn’t enter the local market. If there was no competition, there was pressure and then there was impetus. As a result, it was not good for the development of a city.

Observed from the value form, real estate industry is the material carrier of capital. The essence of capital is to pursuing the maximum interest. The capital always flows towards the area and city where it can create more increment. The flowage of capital brings up the flowage of enterprises and their brands. Because the space for developing in front-line cities has been in saturation comparatively, the powerful enterprises will enter the area where they can get more opportunity to purse maximum interest.  

There is an obvious fact that the capital coming from Beijing, Zhejiang province and Guangdong province has been increased in Changsha, Chengdu, Chongqing, Kunming and Nanning. Let’s take Changsha as an example. Within 49 developers who have got the projects, a large part of them comes from Guangdong province. The manager of Nanning real estate development company Mr. Lai Xijin said the developing space of real estate industry of Nanning city was larger compared with developed cities. The profit margin of real estate investment in Naning was still very big.

The exploration of Pan Pearl River regional cooperation is valuable in China. In 2005, during the first real estate forum of Pan Pearl River Regional Cooperation, the vice president of Construction Minister Mr. Liu Zhifeng said the Pan Pearl River which crossed the eastern part and the western part of our country and included HongKong and Macau, was a rapid developing area of real estate industry. The regional cooperation of real estate had special meaning for our country.

In recent years, the Guangdong real enterprises entering the Pan Pearl River region has increased obviously, which contributed a lot to the local economy.  According to the feedback from construction departments in different provinces, there were 9 enterprises investing in Changsha in Hunan Province and 20 enterprises in Jiangxi Province.

The chairman of Guangdong Housing Association Mr. Chen Zhiquan said the real estate industry would still have enough space and time for developing, if the exploitation was limited to certain area, then the development would be blocked because of the limited resource and space. Both the developed area and under-developing area need to face a problem about how to upgrade. The vice president of Guangdong Construction Department Mr. Liu Jinjiang said the Guangdong real estate industry developed rapidly, the market was mature and the superiority such as technology, capital and brands had been established. At the same time, with the adopting of CEPA, the HongKong enterprises could supply real estate services and increment services individually and the cooperation between Guangdong and HongKong real estate industry became available, which would definitely facilitate the cooperation of capital, technology and management experience within the framework of Pan Pear River Delta.

 The chief of real estate department of Construction Office in Hunan Province Mr. Peng Xiancheng said it was a shortcut for facilitating the healthy developing of real estate industry of Hunnan province to melt into the Pan Pearl River regional cooperation. It would supply richer resource of Hunan real estate industry and bring up more valuable successful experience from other brother provinces. At the same time, it would build up a bridge for the communication between different real estate departments and enterprises.