SHANGHAI Xingye Housing Co, one of the biggest publicly-listed real estate companies in China, and Shanghai Mingdao Real Estate Development, a smaller private company, entered the market at different times, but both share a common belief: confidence in the Shanghai market. Xingye Housing was formed in 1988 when economic reforms were beginning to take off in China, while Mingdao Real Estate Development started business when the market was at its toughest - barely two months after the central government announced macro-economic controls to cool the overheated economy. Xingye Housing was able to enjoy the fruits of its labour before the pinch from the austerity drive took effect. General manager Cao Guangliu said the company's profits rose from 100,000 yuan (about HK$92,600) in 1989 to 25 million yuan last year. 'The impact of the austerity measures was relatively less as we started early and changed our direction and strategy accordingly. 'High risks, long-term projects were shelved and we relied mainly on our internal financial resources. 'When the market was slow, we adjusted our investments. The scale of projects was reduced, or they were delayed or transferred to other companies to be developed. 'Now we concentrate only on well-located developments which will guarantee good sales.' He said prices for their flats had not increased since 1993. The average price was about US$167 per square foot. But, Mr Cao said the company had experienced growth of about 20 per cent due to the Shanghai market's potential. In contrast, the general manager of Mingdao Real Estate Development, Jiang Keping, said business had been an uphill struggle since establishment in August 1993. 'This is a hard time, especially for a small firm like ours, but we are optimistic because the Shanghai market is large and holds lots of potential,' Ms Jiang said. She said they needed three more years to get into the swing of things. 'The competition is tough and there are so many real estate firms of all sizes in the city.' The company is no longer the only small, privately-owned firm in Shanghai as it was in 1993. The number of public and private real estate firms has increased from 94 to 2,080 over the last two years. Demand for housing is soaring against growing personal wealth and popularity of property ownership. This should be a boost to Mingdao Real Estate Development, primarily interested in domestic housing. 'I want to build with the aim of improving the lives of the lao bai xing [masses]. 'Location is a very important factor.' Ms Jiang said they concentrated on projects in city areas accessible by buses. Their first two development projects included a low-cost housing project on Chaoyang Road where construction work was due to start at the end of the month. Total investment of between 100 to 200 million yuan would be used to build multi-storey blocks with total gross floor area of 968,400 sq ft. Ms Jiang said they would be looking for partners to take minority stakes. She said the prices for the properties would be reasonable and affordable for the masses. Sales in the first lot of the Chaoyang development will be in the middle of next year. The other plan was to build a three-storey garden house with a floor area of 5,143 sq ft to sell to foreigners. 'We are trying this out with one house. Our primary market is still domestic.' 'We hope to expand bit by bit. A small company like ours relies on reputation. I have never been dishonest and this is my principle in doing business.' Mr Cao said the slowdown in the market was temporary. 'If not for the austerity measures, our development in this market would be greater.' His company's confidence is amplified by the fact that 861,120 sq ft of gross floor area will be completed this year, compared to 32,292 sq ft last year.