The National Development and Reform Commission (NDRC) said a quote in the China Times attributed to Huang Hanquan, Assistant Director of the Industrial Institute of the NDRC, that there would be “no mention of a real estate tax” for at least three years, was incorrect. The NDRC said that the China Times report had already caused “a very negative social impact because it confused the public about whether the central government would continue to be tough against speculation in the country’s overheated housing market.” Speculation on the introduction of a property-ownership tax has increased since a government meeting chaired by Premier Wen Jiabao in mid-April concluded that work on drafting real estate-related taxes should be accelerated. In China, tax is only levied during home sales, and a property-ownership tax has been regarded by analysts as one of the most effective ways to curb real estate speculation, the Shanghai Daily reports.

Some Fortune 500 CEOs said soaring housing prices in Beijing are forcing university graduates out of the city. “There is no value in building one of the world’s most desirable cities if working people cannot afford to live in it,” Hubertus von Gruenberg, Chairman of ABB Group, told the Ninth Meeting of the International Business Leaders Advisory Council for the Mayor of Beijing. “To put it in perspective, the average price of housing in Beijing is about USD3,700 per sq m, similar to Tokyo, but the average income in Beijing is less than 10% of Tokyo’s,” he said. While Beijing remains an attractive tourist destination, it is now one of the world’s 10 most expensive cities to live in. In the recent PricewaterhouseCoopers (PwC) study, named Cities of Opportunity, the Chinese capital scored near the top in foreign direct investment (FDI) and Fortune 500 headquarters, but housing and city livability were pulling down Beijing’s score. Gruenberg suggested imposing a property tax could be a good choice to curb investment-led demand.

• The Chinese government has issued an urgent notice to governments at all levels to set up and implement new compensation standards for land requisition before July. Local governments are required to pay heed to “reasonable” requirements of people whose homes are to be pulled down, and compensation standards should be strictly followed or raised if they are too low.
• One-third of Chinese billionaires are in the real estate business, according to a report by cuaa.net, an independent Chinese website focusing on alumni affairs. Half of them are concentrated in three major industries: real estate, energy and information technology. China has 1,958 billionaires. Of these, 567 people are in the real estate sector.
• Chinese developer Longfor Properties has seen its contract sales drop by 40% to CNY1.5 billion so far this month from April as buying interest is dampened by central government efforts to cool the market. The developer had no immediate plans to offer discounts to perk up buying interest.

China Resources Enterprise (CRE) said it is well placed to benefit from China’s rebounding economy, as it posted healthy profit growth on the strong performance of its beer and supermarket operations. The group, which produces Snow beer with SABMiller, said first quarter profit rose to HKD3.73 billion from HKD417 million a year earlier, including a HKD3.01 billion gain from the disposal of its stake in fashion group Esprit. The company’s underlying consolidated net profit from continuing operations increased by 25.6%, as revenue rose to HKD21.51 billion from HKD17.17 billion a year earlier. CRE’s beverage sales rose 13.5% to HKD4.46 billion, accounting for more than 20% of the quarter’s revenue. The sales volume of beer rose 10.4% to 1.73 million kiloliters, with growth coming mainly from newly built and newly acquired breweries. Sales of the Snow brand rose 16.1% to 1.55 million kiloliters in the first quarter of this year, accounting for 89.6% of the total sales volume. The company operated more than 70 breweries in China as of the end of March, with an annual production capacity exceeding 14 million kiloliters. As the largest brewer by volume in China, the company had about a 19% market share as of the end of last year.

The global downturn has not dented China’s thirst for luxury goods, according to a survey by global consultancy KPMG. The survey, which interviewed more than 900 people in 15 cities, found that 62% maintained their spending on expensive goods last year and this year, as the country emerged from the effects of the downturn. “Despite a tougher economic climate, respondents demonstrated their brand loyalty, as they chose to stick with existing brands rather than downgrading to less prestigious options,” KPMG said. China has the world’s second-highest number of dollar billionaires after the United States, and a new class of wealthy created by the economic boom has seized on foreign luxury brands as status symbols. Respondents to the KMPG survey were between 20 and 44 and earned at least CNY4,500 per month, with a minimum income of CNY6,500 in the larger cities of Beijing, Shanghai, Guangzhou and Shenzhen.

• The National Development and Reform Commission (NDRC) said it would improve scrutiny of drug prices set by pharmaceutical companies to counter collusion between pharmaceutical companies, government agencies and hospitals that keeps prices high. The commission plans to increase the surcharge ratio for cheap drugs and reduce the ratio for expensive drugs to encourage hospitals to sell more cheap drugs.
• Former Gome Electrical Appliances Chairman Huang Guangyu has filed an appeal against his 14-year jail term for illegal business dealings, bribery and inside trading, disputing the charges and saying the sentence and fines were too heavy.

More than 500,000 people visited the Expo on May 29, breaking the previous day’s record of 382,100. There were long queues at entrances as well as almost all the pavilions, restaurants, toilets and snack stalls. The number of group visitors reached 180,000 and there were still long queues at the Houtan Entrance in Pudong by 10:30 a.m., the main entrance for groups. Visitors had to wait for up to eight hours to enter the Saudi Arabia Pavilion. The Expo organizers have stopped the sale of group tickets to companies and institutions to ensure there are enough for individual buyers. They fear companies are giving out the tickets as gifts to employees, which could cause a flood of people to the site at the end of the Expo. So far, more than 37 million tickets have been sold while only 6.8 million visitors have entered the site. Income from ticket sales has reached CNY5 billion since sales started.