China’s real estate market is undergoing a crisis with sluggish sales and a slow economic recovery. Meanwhile, Chinese state-owned enterprises (SOEs) are rapidly gaining dominance in real estate sales, while private companies, including giants like Evergrande Group and Country Garden, face looming debt defaults. This power shift is raising questions concerning the Chinese regime’s intent to expand the SOEs and its implications for the broader economy. This phenomenon in the Chinese economy gave rise to the catchphrase, “The state enterprises advance, the private sectors retreat,” meaning that the SOEs are expanding and forcing out private companies. The regime would generally favor SOEs in policies and subsidies and, therefore, gradually eliminate competitors from the market. This trend signals that China’s real estate power landscape is facing a major reshuffling. Real estate contributes to around 30 percent of China’s GDP and is, therefore, critical to the stability of the country’s economy. Data shows that the total sales of China’s top 100 real estate companies from Jan. to Oct. amounted to 4.56 trillion yuan (US$624.7 billion), a decrease of 12.8 percent compared to the same period last year. The top five companies on the sales list were dominated by SOEs backed by the Chinese Communist Party (CCP). Topping the sales list was Poly Real Estate, a subsidiary of the state-owned China Poly Group, whose sales from Jan. to Oct. rose 1.4 percent year-on-year to 368.21 billion yuan (US$50.4 billion). This amount is 6.7 times that of 22nd-ranked China Evergrande’s 54.6 billion yuan (US$7.5 billion). In the second to fifth place on the sales list, all are SOEs, and three out of four of them had increased their sales volume in the past year. In China’s real estate sales rankings from Jan. to Oct., the pattern of the top 100 real estate companies is undergoing a complete remake. Country Garden, a privately owned company, fell out of the top five and ranked sixth, with its sales volume plummetting 49.3 percent year-on-year. Another private property developer, Sunac China, saw their sales plunge the most year-on-year by 50.5 percent among the top 50 companies. The real estate SOEs’ sales performance is even more remarkable in the land market. The amount of land ownership is a crucial resource for real estate companies to develop, which determines their future market share. However, due to the limited capital strength and the downturn of the Chinese real estate industry, the once-large private companies are no longer in a position to acquire more land. The CCP’s state-owned real estate companies are taking advantage of the situation to take control of high-quality land resources. According to data from January to the end of October, among the top 100 Chinese real estate companies, nearly 50 percent of them have almost stopped acquiring land, and most of these real estate companies are ranked in the lower half of the top 100 in terms of sales performance. The top ten real estate companies in land acquisition are all SOEs controlled by the CCP. SOEs also accounted for 66 percent of the land acquisitions, while private Chinese companies only accounted for 22%. This shows that the future dominance of China’s real estate market will be in the hands of these SOEs. Mike Sun, a North American investment consultant, spoke to The Epoch Times: “Seeing the difficulties experienced by private real estate companies, the SOEs seized the opportunity to acquire land for two major reasons. First, they wish to stabilize the market by having the CCP own most of the land in the country. The regime certainly does not want to see their land depreciate in value. Secondly, the SOEs have not suffered significant losses during the real estate crisis. So they are taking advantage of the decline of the private companies to accelerate their goal of expanding state ownership at the expense of privately owned companies, thus achieving dominance in the real estate power map.” Mr. Sun believes that the economic development model led by real estate development and urbanization since 1998 has come to an end and that the collapse of the real estate sector is inevitable. Since the second half of 2021, property prices in China have continued to fall, breaking the previous market trend of only rising prices. China’s economy has also been on a downward trend, with the youth unemployment rate hitting record highs at 21.3 percent in July. Some academics suggest that the actual figure could be as high as 46.5 percent. The real estate crisis in China is also starting to impact the financial sector, which may lead to a broader economic crisis.

The Asian Development Bank (ADB) has approved a $150 million loan to Bangladesh to provide financing for cottage, micro, and small-sized enterprises (CMSEs) operated by youth, returning migrant workers and rural entrepreneurs, particularly women, who have been hit hard by the COVID-19 pandemic.      The loan to Bangladesh Bank, the nation's central bank, will be on-lent to participating financial institutions (PFIs), which in turn will help 30,000 CMSEs operated by the beneficiaries.      The project aims to facilitate employment creation and help these vulnerable groups recover from the adverse impact of the COVID-19 pandemic, said a press release.      The release said youth unemployment remains in the country, and they are more severely affected as they concentrate in sectors such as retail trade, accommodation, and food services, which were worst hit by the pandemic.      About 400,000 overseas migrant workers have returned since the start of the pandemic, and many remain unemployed. Rural incomes have stayed depressed and nonfarm employment opportunities remain limited. Rural enterprises were severely affected, putting further pressure on rural employment.      "ADB supports the Bangladesh government's long-term strategy to tackle the country's employment challenges, which has been exacerbated by the pandemic," said ADB Principal Financial Sector Specialist for South Asia Dongdong Zhang.      "Promoting access to finance will help address a critical challenge of helping vulnerable groups in the immediate term and developing CMSEs in the long term,"Zhang added.      Given the limited access of women to finance and their high concentration in retail, travel, and hospitality sectors, they have borne brunt of the impact of the pandemic. The project has targeted to disburse 20 percent of the funds to microbusiness led by women to support their recovery.      ADB will provide an additional $900,000 technical assistance grant from its Technical Assistance Special Fund for Bangladesh Bank and PFIs to help them strengthen their risk management capacities, business process, and information systems.      The assistance will also boost their support of CMSEs by incorporating mobile finance, value chain financing, and sustainable financing tackling climate change.      This project builds on the $250 million policy-based Strengthening Social Resilience Program, approved by ADB in June 2021, to strengthen Bangladesh's social protection programs and resilience of vulnerable groups.      It also complements the $50 million additional financing to the ongoing Microenterprise Development Project, approved in December 2020, to help restore economic activities of microenterprises affected by COVID-19 in the country. Source: BSS AH

Prime Minister Sheikh Hasina said that none can hinder progress of the country even if who comes to power in future. She also informed that the government is paying imperative to economic diplomacy as well as commodity diversification and creating new markets. The Premier said these at the of National Export Trophy distribution program at Hotel Sonargaon in the capital on Sunday.   The main export oriented sector is ready made garments industry. Besides, 36.67 billion dollars was earned in the 2017-18 fiscal year by exporting medicines, leather goods, frozen foods, jute and jute goods and plastic products. The government’s target is to set it to 60 billion dollars by the year 2021. For playing special role in export 24 commodities and 56 enterprises in the service sector have got the National Export Trophy for the year 2015-16. For playing role in plastic goods export Bengal Group was awarded the Silver Trophy.   Prime Minister Sheikh Hasina handed over the prize to Bengal Group Vice Chairman Md. Jashim Uddin.    Service Engine Enterprise Chairman ASM Mahiuddin Monem was awarded the Gold Trophy for software sector and Four H Group’s Gaohar H Jamil was awarded the Silver Trophy for garments sector. The Prime Minister said, the government is doing all the necessary work for communication system development, increasing power production to make the business easy. She said, for graduating as a developing country after 2024 we may lose some opportunities but the export growth will increase and the development of the country to continue for taking government policies. At that time she upheld her credence to remain our heads high. AH