In a recent internal document, Yu Liang, chairman of Chinese property giant Vanke Group, said that China’s real estate industry had entered the “Dark Age,” which is a survival year for Vanke.
China Business News reported on Feb. 11 about an internal document at Vanke’s 2022 annual meeting. Yu Liang, chairman of Vanke, said that the Chinese real estate industry witnessed two significant changes. First, the market segmentation is becoming more pronounced, and the industry’s size is shrinking.
Yu claims that the Chinese regime does not allow the real estate sector to consume too many financial resources nor enable residents to be burdened with excessive debt because these financial resources are ineffective in sustaining the economy. Yu Liang also added that de-financialization is an inevitable trend and a painful process.
He pointed out that the real estate industry is no longer in the “Silver Age” or “Bronze Age,” but in the “Dark Iron Age,” and the industry profit is about 10%, so the employees’ income and subsidies have to establish a new level.
In terms of corporate culture, Yu Liang stressed the importance of saving money and a “wartime” working attitude.
Vanke Group is a major residential property developer in China. It specializes in developing, managing, and selling properties across more than 60 cities in China. Later the company opened businesses in the U.S., UK, Hong Kong, and Malaysia.
The company went public in 1991 on the Shenzhen Stock Exchange and had the largest market capitalization in 2006 on this Exchange.
According to Fortune magazine, Vanke is ranked 160th among the top 500 companies globally in 2021, with $286 billion in assets and more than 140,000 employees.