Slums for the masses, fortunes for the few

Hu Bin is your archetypal Chinese real-estate entrepre­neur. Built like a bull, with a huge, moon-shaped head, a permanent grin and tiny, nicotine-blackened teeth, he is also the embodiment of Beijing’s sudden determination to use its huge capital reserves to buy the world.

Despite an estimated £5 billion fortune, Hu Bin would normally have remained a low-key figure, even in China. His company, Shanghai Zhongzhou International Holding, is the unlisted owner of isolated packets of high-end residential property dotted around Shanghai. But on 17 October he did something guaranteed to attract the attention of the world’s press, splashing out £15 million on a 40,000 square metre artificial island off Dubai and promising to spend £100 million turning it into a miniature Shanghai.

Hu’s confidence is one more sign of the power of emerging China. By planting a Chinese flag in the Dubai sand, he’s announcing the next leap forward in the development of China’s property sector. He has also become the perfect embodiment of the country’s ever-widening divide between rich and poor, in which entrepreneurs and party members lucky or skilful enough to manipulate the system quickly leave behind the vast, penurious majority. Investment in Chinese residential and commercial property in the first seven months of 2007 amounted to the equivalent of £79 billion, up nearly 30 per cent year on year and spurred on by rising incomes, a booming economy and relatively low interest rates.

The sector has been further boosted by Beijing’s attempts to strengthen real estate protection for private residents. In March a long-awaited property law was introduced to provide equal protection for buildings owned by state and private interests. It was formally enacted last month during the country’s rubber-stamp National Congress — and all eyes are now on the first court case filed under the new law, in which a 60-year-old man in Beijing is suing a property auction company for confiscating six apartments from him in 2002.