Chinese developers reply to questions over unpaid land appreciation taxes

An escalating public dispute between state media and developers about unpaid land appreciation tax is shedding light on the deep-seated opposition facing mainland leaders as they expand economic reforms.

On the surface, the dispute is about how much tax is unpaid but analysts say it runs deeper. The power of local authorities and money from developers are closely mingled, they say, making the push by central authorities to collect more tax a politically tough and sensitive challenge.

The dispute was sparked when state television quoted an estimate from Beijing lawyer Li Jinsong as saying that developers had unpaid land appreciation tax of 3.8 trillion yuan in the eight years between 2005 and 2012. The programme named dozens of top developers including Agile, Soho China, Guangzhou R&F and China Vanke.

A few hours after that broadcast, Ren Zhiqiang, the outspoken chairman of Huayuan Property, a medium-sized state developer, posted a video on his weibo account and pointed out eight "mistakes" in the programme.

"Can't the state CCTV be professional and rational? Don't always try to fool people!" Ren wrote on his microblogging account.

He later said he was considering a lawsuit against CCTV and also initiated a press conference on Wednesday by the China Real Estate Association about the broadcast. Apart from Ren, reaction from other developers has been more measured. Some decided not to attend the conference at the last minute, but over a dozen have published statements denying any tax evasion.