Property Investors Rush to “Mini-Hong Kong”
Residential property prices in Qianhai, an economic development zone near Hong Kong, has partly surpassed those of Shenzhen, generating debate over the effectiveness of the government’s economic stimulus plan, as well as the future of local business investment. From Tian Chen at Reuters:
Qianhai officials signed co-operation deals with 37 companies in Hong Kong this week, while Chinese private equity firm Hony Capital said it had been appointed to bring leading foreign funds to the zone, a sign that China is wasting no time in developing the area.
[…] Shares of Shenzhen government-backed commercial property developer Shahe Industry, which is 15 minutes by car from the proposed business zone, hit their highest in more than a year in early July even though a company executive said it had not signed any deal on the Qianhai project. Its shares have surged more than 70 percent so far this year, outpacing an 18 percent gain in China’s property index.
Some market watchers, however, are skeptical.
“The Qianhai concept and government tie may have played into the share price surge, but solely investing in the concept is irrational,” said a Shenzhen-based analyst who declined to be named.
Read more about the central government’s plan to develop Qianhai, which is officially called the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, via China Daily. For more on property investment and related policies, see Pressure Building on China’s Property Sector, via CDT.