Li jianshe, steel industry executive Over the past 14 years, Hong Kong-listed Maanshan Iron and Steel Co has cranked up its production by nearly five times to 9.75 million tonnes in response to a surge in fixed-asset investment, especially in the booming mainland housing market. But Li Jianshe, manager of Maanshan's marketing department, said the red-hot property market was a cause for concern for his company. 'As a upstream sector, we would hope the real estate sector remains healthy and none of us would have to go through the aftershock as a result of a bubble bursting in real estate,' Mr Li said. Statistics from the China Steel & Iron Association indicate that steelmakers on the mainland churned out 349 million tonnes of steel and iron products in 2005, flooding the market with low-end output. This raised fears that a boom in the real estate sector could be leading to excess capacity. 'So it's time for a policy shift to cool down housing prices,' said Mr Li, who believed one area the government needed to take into consideration was the excessive investment in luxury projects, which he blamed for much of the soaring property prices on the mainland. He said the government should develop more affordable housing projects for low and middle-level income earners. 'They are the engines for sustainable growth as these people account for 70 per cent of homebuyers,' Mr Li said. But Mr Li painted a rosy picture for the steel sector in the long run, saying prospects for the industry were positive because the country's urban development was far from mature. 'The sector will continue to grow in the next 10 years to keep up with rapid development in the housing market and infrastructure projects such as road and high-speed rail systems,' Mr Li said.
