CCTV-9: China’s Land Kings
I was on CCTV-9’s “Dialogue” program Friday night. The topic was China’s “land kings,” state-owned enterprises (SOEs) that have submitted sky-high bids in recent land auctions in Beijing, in defiance of central government efforts to tamp down runaway property prices. I said that, while it may be tempting to see the land kings as “rogue” companies or examples of corporate misbehavior, their actions are just a symptom of fundamental factors in the Chinese economy that are causing huge sums of money to be channeled into real estate, regardless of whether it earns a good investment return or not, and regardless whether the end product is of any practical use. Unless these deeper issues are addressed, trying to stop SOEs from pouring funds into property will be like trying to keep water from flowing downhill.
My fellow guest on the show was Vincent Mo (Mo Tianquan), the CEO of SouFun.com, one of China’s leading websites devoted to the real estate market. He and I offered differing views on the supply-demand dynamic in the market and whether an annual property holding tax would be a good idea. You can watch the program here or by clicking on the photo above.