麻省理工学院 STL地产创业实验室

Real Estate Entrepreneurship and Social Responsibility

Yu-Hung HongFounding Director

MISTI-STL China Summer Camp Program

Information Session 3

Outline

• Innovation and Sustainability

• China’s Development Model

• Reason Behind the Model

• Opportunities and Challenges

Innovation & Sustainability

Social Responsibility

China’s Development Model

Local govern-ments

Public or private

developers

Central government

Attempt to achieve the policy goals

mandates

The New Normal

The New Normal

Tianducheng, Hangzhou, Zhejiang

source: http://desertedplaces.blogspot.com/2013/08/a-parisian-ghost-town-in-middle-of-china.htmlanoramio)

Housing Oversupply

Housing Oversupply

Central 18%

Local82%

Investment in Public Utilities and Infra-structure: 2011

Total: 5,906.7 Billions RMB

Budget12%

Bank loans 27%

Others61%

Funding sources for Public Utilities and Infrastructure 2011

Government Debt Audit

• 31 provinces

• 291 cities

• 2,778 counties

• 33,091 townships

• 2,454,635 loans

Government Debt Audit• Debts need to be repaid by National and Subnational

governments.

• Debts that governments guarantee repayments if they go

into default.

• Debts that governments have to rescue (repayment

obligations?) if these loans go into default.

Government Debts in China

Subnational Government Debts in China

Who borrowed?

For What Purposes?

Risks

• Local governments depend on land

leasing revenue to repay their debts. (By

the end of 2012, 11 province, 216 cities,

and 1,396 counties have used future land

revenues as collateral to borrow 3.5

trillion RMB, about 37% of all subnational

debts.)

Risks

Opportunities• Re-use under-utilized land and

buildings for:o innovative startups;o co-working spaces; ando co-living spaces.

• new branding strategy—environment conservation and cultural preservation.

Challenges• Key stakeholders refuse to work

together.

• Real estate developers may not pay enough attention to the types of services demanded by customers.

• New education programs on real estate management may be unavailable.

Local public finances

Proposed Land Tenure Reform Strategy

1 2

Ecology and farmland

preservation and food security

3

Rural land tenure

4

Integration of urban and rural land markets

Land value sharing

Rural leasehold system

Public land acquisition

system

Land use planning

Agricultural modernization

New town development

Transportation

Incomplete property

rights houses

Clearly defined and

secure leasehold

rights

Gradual legal reforms and policies to stabilize real estate prices

Banking and real estate investment

reformsLand quota

trading system

Alternative local revenue

sources