Annual Report - QuamIR

Chairman’s Statement
Government policies continue to affect China’s property
market.
During 2011, the PRC government continued and increased the number of
policies implemented and designed to control property prices. These policies
include: increasing interest rates, higher down payments, restrictions on
the number of properties that can be purchased, restrictions on loans to
developers etc. Such policies clearly had an impact on transaction volumes
for the property market, and have resulted in a decline in property prices.
However, we remain positive over the long term given
strong long term end user demand, and will continue
our transformation from a construction company into a
major PRC property developer.
For 2012, our view is that while the government will continue to implement
measures to discourage excessive speculation, there is real end user demand
for properties, and the government remains supportive of this sector. The
property industry in China is key to supporting domestic demand, a desire
that the government recognizes is important. Therefore, although the
government measures have clearly reduced short term demand, we believe
the government will not implement policies to the extent that there will be a
further major correction in the property market.
Despite difficult near term market conditions, the Group is continuing to make
progress on its property developments as it completes its transformation into
a major PRC property developer. By the end of 2011, the Group discontinued
the construction/contractor business both in Hong Kong and in the Mainland,
in addition to selling non core property projects.
4 HKC (Holdings) Limited • Annual Report 2011