The Chinese yuan, also known as the renminbi, is already convertible under the current account - the broadest measure of trade in goods and services. However, the capital account, which covers portfolio investment and borrowing, is still closely managed by Beijing because of worries about abrupt capital flows.
Biggest developer cautious due to high land prices
China Vanke, the largest developer listed on the mainland, is taking a prudent approach to land acquisition, saying it would rather miss an opportunity than make a bad purchase at a time of high land prices.
As of December last year, the company had attributable gross floor space of 381.8 million square feet, which it said was sufficient for the moment.
'It will meet the company's development needs within the next two to three years,' said China Vanke president Yu Liang, speaking in Hong Kong. The company, which is listed on Shenzhen's A-share market, would continue building up cash reserves to wait for buying opportunities, he added.
'It's hard to predict how much land prices will fall right now, but we're still closely monitoring the market in different cities,' he said.
Last year, it acquired 52 development sites, with about 99.2 million sq ft planned gross floor area attributable to the company, at an average land cost of 2,707 yuan (HK$3,314) per square metre.
This year, Yu said the firm had to pay a total of 30 billion yuan in land premiums.
For the first two months of this year, he said China Vanke's sales revenue stood at 19.5 billion yuan, the same as the year-earlier period, and that cash reserves totalled 34.24 billion yuan as of December.
Commenting on the mainland property market outlook, he said central government had made it clear that austerity measures designed to cool the real estate market would remain in place this year. But he said the environment for first-time home buyers had started to improve.
China Vanke said it had focused on small and medium-sized ordinary housing, with sales of residential units below 970 sq ft accounting for 52 per cent of revenue, while sales of residential units below 1550 sq ft accounted for 88 per cent.
The company said its 2011 net profit rose 32.2 per cent to 9.62 billion yuan. It declared a final cash dividend of 1.3 yuan for every 10 existing shares. Its shares closed down 2.91 per cent at 8.35 yuan yesterday.