The last place in China you would expect to find an oversupply of property is between the beautiful lake city of Hangzhou and the country’s commercial heart of Shanghai, a 170km stretch that high-speed trains cover in just over an hour. Today, in addition to its reputation as a tourist draw, Hangzhou is known as the home of Jack Ma, founder of Alibaba, the internet group likely to go public soon in the biggest tech listing ever.
Property and Alibaba are not as unrelated as one might think.
Concern over falling prices in the property market has so far focused on housing. This is partly because of the social and political tightrope that the residential market represents for Beijing. If prices rise too swiftly, the have-nots may riot in the street. If prices fall too steeply, the haves will protest over lost wealth.