Real Estate of China in 2008 undergone an extreme hardship time because of subprime crisis. Since early 2000 real estate in China got it first booming time and its good prosperous market always continued to 2008. After that economic crisis swept whole China reference to every industries. Meanwhile main real estate industry and steel industry also have to confront this severe situation with a lot of bankrupt small and medium enterprises.
Severe Situation to Real Estate
When economic crisis was occurred at that time, namely 2008, there were so many real estate enterprises suffered unprecedented difficult situation. Well, meanwhile, Vanke and Greentown were typical enterprises which have to face the huge loss.
Vanke Real Estate
Not long ago, Vanke cried out in the cold winter. But this was not Vanke’s first empty call. As early as the end of 2007, Mr. Wang Shi threw out the “inflection point” theory, saying that the inflection point of housing prices has come. At that time, judgment and prediction of Mr. Pan Shiyi was that Vanke’s capital chain had some problems, and it was necessary to speed up the withdrawal of funds by lowering prices. However this judgement had became reality later. In 2008, Vanke took the lead in reducing prices by 15 percent to 30 percent across whole nation, setting a sales record approached RMB 47.9 billion yuan that year, and took the lead in China’s real estate industry. As a pioneer in the real estate industry, under the leadership of Mr. Xu Rongmao, “Shimao” real estate once achieved the top ten in the country. But in the 2008 economic crisis, it was also unlucky to escape the danger of the capital chain.
Greentown Real Estate
In April of that year, Greentown immediately sold two lands in Hangzhou and metroplis Shanghai, and lost almost RMB 150 million yuan in Shanghai alone. The two lands were taken at a high price just a year ago. The greentown’s “hardship time to its life and death” shocked the entire property sector at that time. Afterwards, Mr. Song Weiping, the founder of the greentown, had to admit that he had not done it steadily enough before, and that the high-speed and high-debt development model was a mistake.
These enterprises were facing the dilemma of bankruptcy at that time. Based on this thorny problem, the China government launched a “four trillion” rescue plan. This was really good measure to save a lot of industries for many small and medium enterprises. Of course, the original intention of the RMB four trillion yuan was not aiming to real estate, but to use investment stimulated the economy, revitalized ten important strategic industries such as steel, automobile, ship, petrochemical industry, to avoid a cliff-like decline in the economy.