Xinhua reported that recently some real estate developers in Beijing, Shanghai, and Hangzhou have reduced their housing prices in order to promote sales. For example, the “Beijing Business International City” apartment complex is selling at 15,000 yuan per sq. meter (U.S. $256 per sq. ft), down from its peak of 25,000 yuan. “Long Hu Li Cheng” in Shanghai gave the buyers a 280,000 yuan (U.S. $43,000) discount, or 20 to 30% off the list price. This has attracted a lot of buyers, but has also greatly agitated the earlier buyers who purchased properties at a higher price. The earlier buyers are demanding refunds of the “lost value” or even that they be able to return the properties to the developers.

The article listed three groups of developers who are considering the decision of whether to reduce the price of property. The first group conducts quick sales in a short period to recover their capital investment. It tends to include limited developers with only spotty action and does not impact the overall market price. The second group is the small to mid-sized developers who might be forced to lower prices because of pressure to repay loans. There was a burst in real estate trusts after 2009 with an interest rate of 15% or more. The trusts must be paid back between September of this year and the end of next year. The third group is the big companies that have sufficient capital. They face a pricing dilemma. If they don’t lower their prices, the properties won’t sell; but if they do lower their prices, there might be complicated disputes with owners who paid higher prices earlier.

According to statistics, of 70 large or mid-size cities, the housing prices in 17 of those cities were lower in September than a year ago; 29 kept the price the same; and for the cities with an increased price, the increases were all below 0.3%.

Wen Jiabao recently expressed that it is critical to control the real estate market and maintain a healthy growth of the market (Ed: not to have a dramatic drop in prices). Officials from Shanghai and Beijing all expressed their determination to “unswervingly control the real estate market and ensure that housing prices remain ‘flat or with only a slight decrease.’”

Source: Xinhua, Oct 26, 2011
http://news.xinhuanet.com/politics/2011-10/26/c_111125641.htm

According to Worker’s Daily, by October 17, 2011, ten major production accidents had occurred across China, making October of 2011 the highest work accident occurrence month this year. Work safety in China is now in a grave situation.

On October 21, 2011,  Luo Lin, head of the State Administration of Work Safety (SAWS), said at the National Safety Production Video Conference that more major accidents had occurred in the beginning of the fourth quarter than in the same period for the last 3 years. In October of 2010, there were 6 major production accidents across China. This October, by October 17, 2011, 10 major production accidents occurred in China with 151 casualties and missing people. The accidents involved several industries, with the most being in coal mining.

Source: Worker’s Daily, October 22, 2011
http://news.workercn.cn/c/2011/10/22/111022041037643367619.html

On October 22, 2011, China Business Journal published a report on an investigation into secret transfers of assets to Canada for entrepreneur emigration.

While the whole nation has been discussing whether to rescue the debt-ridden small and medium enterprises in Wenzhou, Zhejiang Province, business owners from Wenzhou and Yiwu in Zhejiang have been getting ready to emigrate abroad. Some business owners obtained bank loans using their businesses as collateral and transferred the borrowed money abroad for entrepreneur emigration to Canada; other entrepreneurs transferred their assets overseas through different channels long ago, just waiting for the right time to declare bankruptcy. Many Yiwu entrepreneurs have left businesses behind in China, which remain only as empty shells.

Source: China Business Journal, October 22 2011
http://www.cb.com.cn/1634427/20111022/290307.html