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Profits of drug deal higher or Profits of Chinese real estate higher? [Copy link] 中文

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Post time 2011-6-29 06:53:38 |Display all floors
cost: all of building material cost + wages of workers + salaries of project managment team + facilities cost + machinery rent cost = RMB 2,000 per Sq. M.

price paid by customer: RMB 10,000~20,000 per Sq. M.

land cost + tax + fee(collected by government)
+ profits + financial cost (real estate developer) = RMB 8,000~18,000 per Sq. M.

++++++++++++++++++++++
An apartment with 3 bedroom + 1 living room + dining room + 1kichen + 1 bathroom

cost = RMB 0.2 million
price paid by customer = RMB 1~2 million

profits of government + real estate develpers = RMB 0.8~1.8 million


++++++++++++++++++++++++
Each apartment building = 18 level *3*4 = 216 apartments

cost = RMB 43.2 million
price paid by customer = RMB 216~432 million

profits of government + real estate developers = RMB 172.8~388.8 million
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Post time 2011-6-29 06:54:16 |Display all floors
the profits collected by government and property developers are 4~9 times of cost in Chinese real estate industry.
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Post time 2011-6-29 07:01:05 |Display all floors
State Own Enterprise (SOE) surveillance department of Central government of China issued a document last year.

The government instructed most of SOE need to quit the real estate industry in that document.

For example:
In that list Three Gorge Dam Electricity Production (TGDEP) company need to quit the real estate industry.
However TGEDP company dare to offend Central government and go on enlarging the investment in real estate industry.

No doubt huge profits would drive those government officials and merchants crazy.

Of course, it is not an isolated example, but a general one.
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Post time 2011-6-29 07:13:12 |Display all floors
Many Chinese economists (most of them government officials first) said that the luxuriant booming housing market spur the building material market including cements and steel.

But these industries can only get at most 14% of toal payment from the end customers.


Many Chinese economists (most of them government officials first) said Chinese economy would collapse if housing market collapsed.

Why??????????


++++++++++++++++++++
However, in the past several years, many Chinese companies from almost all of industries hurried to real estate developing industry. Chinese real developers are from companies in Home appliance industry, Computer Server industry, Car manufacture industry, Electricity production industry, Petoleum industry, Chemical industry, Mining industry, etc. Some of these companies got most of their profits not from their own major focused industries, but from housing market. This type of phenomena was revlead in many news reports.
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Post time 2011-6-29 07:19:19 |Display all floors
Actually, in theory, the housing market would never collapse.
The housing market price bubble actually is the land lease price bubble.


In the constitution of mainland China (PRC), All land, all mines, all....are owned by government. Of course government has a monopoly on land for apartment.


Government could stop leasing not any piece of land any more if the bubble was going to blast.
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Post time 2011-6-29 07:33:38 |Display all floors
Property developers and governemnt can get at least 80% of toal payment from the end customers.

Where did these 80% of total payments or 4~9 times of profits go?

Inside of Chinese government:
We know millions of millions corruption are everywhere in China through tax and fee deduction in housing market.
Family members of government officials would throw away their Chinese citizenship and moved outside of mainland China after they accumulated to billions of illegal assets and income.

For example, about one hundred Chu-level government officials was involved in the latest scandal in Maoming, Guangdong province. The illegal assets of only one of these corrupted officials is more than RMB 0.1 billion. It was revealed in law court from the news report last week in 2011-06.




But if a SOE was a property developers, how would the profits go? or How did the government officials in SOE get illegal income?
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Post time 2011-6-29 07:46:57 |Display all floors
But if a SOE was a property developers, how would the profits go? or How did the government officials in SOE get illegal income?

We can know a little from a law court case from the news report in 2011-06-28.

Route #1:
It remind me of a scandal in a leading white-spirit (Liquor) company of China.
All of drinking products in this company should be sold to one private-own  "X" company.
All of dealers around China need to buy drinking products from this "X" company.

After the number 1 guy in this white-spirit (Liquor) company retired, After the family members of this number 1 guy have thrown away Chinese citizenship,  moved to U.S.A, and became American citizen, we began to know this private-own "X" company was running by the family members of that number 1 guy.

This white-spirit company of China is the famous Wuliangye company.

Okay, in housing market, after SOE built the apartments, a private-own "Y" company would be in charge of the market sale.

[ Last edited by 468259058 at 2011-6-29 07:48 AM ]
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