Beijing casts net far and wide in anti-graft push

The crisis facing Hong Kong-listed Agile Property Holdings after its chairman was put under house arrest has aroused investor concerns about how widespread President Xi Jinping's anti-graft campaign will be in the struggling property industry.

Qi Jingmei, a senior researcher at the State Information Centre, a government think tank in Beijing, told the that corrupt government officials should be worried, but not competitive developers.

"It will not harm the development of the whole real estate industry," she said. "But it's not bad to wash out some weak developers through such a campaign."

Li Junheng, the head of research at JL Warren Capital, a New York-based independent equity research firm with a China focus, said: "Widespread corruption in itself is not new news, but fraud investigations and consequential funding cutoffs are material headwinds for developers."

A housing glut continued to plague the industry and developers needed to strengthen their corporate management during the downturn, Qi added.

The central authorities last month switched their policy stance to support the property sector, ending a tightening campaign of almost five years after sales slumped and prices fell.

The sector accounts for about 15 per cent of the mainland's gross domestic product and affects more than 40 other industries, acting as a drag on the whole economy.