State-owned enterprises controlled by China’s Hubei government have been warned to be “cautious” in new property investment, in a proactive response by the provincial officials to heed Beijing’s call to stave off financial risks. In a September 4 document released by the Hubei branch of the State-owned Assets Supervision and Administration Commission(SASAC) and seen by the South China Morning Post , the state assets regulator ordered companies under its supervision to be “cautious” in new property investment and to “strictly control risk” from September 5. “We made the decision in consideration that there are many provincial state-owned enterprises which engaged in property business of a large investment scale and high growth rate, and there are [ensuing] problems such as high debt ratio, high funding cost and narrowing margin,” said SASAC Hubei of its warning in the document. It did not include details on penalties. SASAC Hubei also urged the province-backed companies to accelerate the construction or sales of current property projects so as to cash in as soon as possible, and in turn reduce debt. The regulator also cited the National Financial Work Conference held in July, saying it was responding to the conference’s call to reduce leverage in financial markets and rein in systemic risks. Hubei is the first province so far to issue such a warning, ahead of the Communist Party Congress in October that is expected to see a top leadership reshuffle. Hubei’s party secretary Jiang Chaoliang was assigned the job in June, but is considered to be a top contender for the governor of the People’s Bank of China, the nation’s central bank. Another political ‘dark horse’ emerges among China’s new generation of governors Hubei’s real estate investment in the first-half grew 13.3 per cent to 222 billion yuan, outpacing the country’s total of 8.5 per cent, according to the province’s statistics bureau. New residential property investment in the first six months surged 42.4 per cent on the year, compared to 14.9 per cent for the nation.