By Jin Ge
Looking at the January sales reports by major real estate developers, I cannot help thinking that the bursting of China’s real estate bubble is happening sooner than I thought. Most of the developers saw their sales number dropped more than 50% compared to January 2011, with the sales of industry giants Jindi Group（金地） and Longfor Group （龙湖） decreased 75.8％ and 72.3% respectively.
Reports from the Ministry of Finance show that real estate continues to be the main source of income for the government. In 2012 Property related tax accounts for 10% of the total tax income of the central government, and 30% of that of local governments. The government also pocketed RMB 3.15 trillion from all the land sales in China; the total sales of property market in 2012 is RMB 5.9 trillion.
Based on the above data, it is safe to say that in China’s model of state capitalism, the government is the biggest real estate capitalist. That is why many people believe the government will come to the rescue again if the property bubble shows signs of bursting.