Property swap is constructive reform

Hong Kong

CHINA'S big property swap suggests Beijing is getting serious about making its giant state firms more focused. Citic, a conglomerate which dabbles in everything from finance to football, is offloading most of its mainland residential property to a government-controlled rival in order to focus on commercial development. The HK$37.1 billion (S$6.6 billion) deal is a sign of constructive reform.

Citic is hiving off assets strewn across 25 Chinese cities. In return, it will get a portfolio of commercial property worth almost US$1 billion and the balance in the form of newly issued shares equivalent to a 10 per cent stake in the enlarged China Overseas Land & Investment (COLI).