Guangdong is eying large state-owned enterprises as potential buyers for its large inventory of unsold commercial homes, the province’s top official said yesterday.

“[The provincial government] is planning to let large

state-owned enterprises purchase commercial housing on a large scale, and [reserve them] exclusively for public rental housing,” said Guangdong governor Zhu Xiaodan at a panel meeting of Guangdong delegates at the national legislative sessions in Beijing.

An oversupply of new homes in smaller cities on the mainland has become increasingly serious in the past year, prompting the government to include destocking in its five economic targets for 2016.

By the end of 2015, Guangdong had 160 million square metres of unsold homes. The national figure stood at 720 million square metres.

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President Xi Jinping said the reduction in property inventory was one of “four battles of annihilation” that China must win to revive its economy – the other three were digesting over-capacity, lowering the cost for companies in the real economy, and guarding against and relieving financial risk.

Zhu vowed to reduce Guangdong’s inventory of commercial housing by more than 20 million square metres in about three years.

The cycle of destocking would be reduced from 17 to 15 months, he said.

Guangdong issued a blueprint on supply-side reforms in January, vowing to divide cities in the province into four categories, each carrying out different targets to destock unsold homes. Shenzhen, which had zero inventory and a high demand for homes, will step up property market regulation.

Zhu said the government had shut down 2,333 under-performing enterprises last year, and the province faced serious challenges in maintaining economic development.

Zhu said Pearl River Delta cities would recruit more Hong Kong students for internships as part of Guangdong’s plan to boost youth exchanges between the province and Hong Kong.

Guangdong would also offer financial incentives to lure young people from Hong Kong to open startup companies in the province’s thirteen free-trade zones, and government-backed youth groups in the province would seek better connections with counterparts in Hong Kong.

Guangdong authorities organised more than 100 youth exchange activities last year targeting more than 30,000 youngsters from the province, Hong Kong, Macau and Taiwan, he said.

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