Is China flexing its real estate muscles?

Iron curtain is defined as an impenetrable barrier to communication or information especially as imposed by rigid censorship and secrecy; used by Winston Churchill in 1946 to describe the demarcation between democratic and communist countries. Many people considered that the downfall of Soviet Union would have ended the existence of the word permanently, but PRC (People’s Republic of China) is going on with the same notion.

You may ask reason behind including the aforesaid paragraph. This has been done since little is known of different aspects of China. We are yet to ascertain the true picture of the Chinese economy including its realty sector and the agonies they faced up to because of the recession.

In the same manner little can be known regarding the latest approach of China Real Estate Information Corp. The company, it has been found, has filed plans with the U.S. Securities and Exchange Commission to sell to the extent that $200 million of American depositary shares through an initial public offering. There is hardly any doubt that this company plays a major role since it is the largest provider of real-estate information and consulting services based on revenue in the realm of China and happens to be a unit of E-House (China) Holdings Ltd., a real-estate services company in China.

It seems that this is a mere part of a larger strategy. China Real Estate, as has been found, is in the process of acquiring the online real-estate business of Sina Corp. Furthermore, once the deal gets completed, the company will start out generation of online-advertising revenue. China Real Estate owns 34% of a joint venture with Sina. Sina would own a sizable stake of China Real Estate after the IPO; the amount is to be determined based on the IPO’s size.

On the other hand the company plans to list on the Nasdaq Global Market under the symbol CRIC. Proceeds from the offering would be used in part for capital spending.

What inference can be drawn from here? Is the company enjoying tacit support of the government? Is the matter a simple part of real estate transactions or whether China is flexing its real estate muscles? We prefer to maintain silence and watch the subsequent developments.