Where can we find affordable housing?

Zhou Botong is a fictional martial arts character in The Legend of the Condor Heroes and The Return of the Condor Heroes in The Condor Trilogy, by Louis Cha. Zhou once created a weird skill called the "technique of ambidexterity," where each of his hands would take on a different set of martial arts skills and fight each other.

We can apply this technique to what's been happening in the real estate market over the past few months. State-owned enterprises (SOEs) have been frequently refreshing the bidding records for the land market; this can serve as Zhou's left hand. The reversion of property to the state and the land reserve system can serve as Zhou's right hand.

SOEs, especially those that are not originally in the real estate industry, have been bidding high in auctions. Some non-governmental enterprises (NGEs), experiencing financial strain, have decided to integrate with SOEs, resulting in rapid growth (front page news of China Real Estate Business, Oct 26.)

SOEs, rich with a budget from the government, have acquired surplus benefits from their main business arena, outside of the real estate market. What's more, SOEs can be granted financial relief even if they don't make money. Comprising the aid of state-owned banks, they can choose a way to get involved wherever they want.

While citizens worried if this would bring an overwhelming increase in prices on the housing market, the government decided to withdraw the rights of land utilization.

If there is market competition for SOEs to get land through auctions, then this is essentially a monopoly.

Suppose there is only one supplier producing a product-no matter what it is or how it is produced, it's bound to be expensive and of poor quality. People in a planned economy understand this concept, but for those do not, just look at our petroleum products and telecom service.

It is tough for us to line oil prices with international practices, just as it is tough to change the two-way charging system for cellular phones. It could be worse; at least we have a few suppliers instead of just one.

So with both the left and right hands aggressively fighting each other, this Zhou Botong technique will inevitably cause a big stir in the real estate market.

In the meantime, where can we find affordable housing?

(This article was translated by Wang Chuyang.)

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