China’s “Godfather of real estate” says Shenzhen must abandon Hong Kong’s property model
September 10, 2019 Category China News Round-up, Weekly
Shenzhen, now a blueprint for China’s urban development, should abandon the Hong Kong property model it borrowed decades ago, warned the country’s “godfather of real estate”, Meng Xiaosu, who spearheaded China’s property reform policies in the 1990s. He said Shenzhen and other cities in the Greater Bay Area should learn from the pitfalls of Hong Kong’s market, including cramped conditions, wealth inequality, and a chronic shortage of land for development. “Hong Kong’s economic inequality and disparity has not lessened but in fact has continued to grow in recent years, surpassing many countries and regions.
“The outlook for the youth in the city is bleak,” said Meng. “From our perspective, a core reason is that the Hong Kong government has neglected the need to provide suitable housing conditions for its citizens, making living conditions harsh in the city.” His stark warning comes after Shenzhen has been tasked by the central government to implement bolder reforms as a model for other Chinese cities in innovation, public services and environmental protection.
The government of Shenzhen borrowed a key idea from Hong Kong: selling land-use rights to developers through auctions. Shenzhen held its first land auction in 1987, pioneering the sale of land-use rights in mainland China. But now Meng has called for major cities to stop following the model. Many blame Hong Kong’s notoriously high property prices – the result of a serious land shortage – for the rising gulf between the haves and the have-nots.
“Many of China’s larger cities today are cramped and suffer from severe traffic congestion problems. The amount of land used for housing in our major cities is also relatively little,” said Meng at the China Valuable Real Estate Awards organized by the National Business Daily in Shenzhen.
“We need to reasonably expand our cities’ usable land, especially to increase the amount of land for construction. We also need to prevent land prices from getting too high as a result of a lack of usable land, artificially pushing up property prices,” said Meng, who is Chairman of the China National Real Estate Development Group. In Hong Kong, land used for housing accounts for only 7% of the total, while in many Chinese cities the figure is around 10%, according to Meng, adding that a quarter of land should be allocated for housing purposes, the South China Morning Post reports.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world