AS EARLY AS 2010, the State-owned Assets Supervision and Administration Commission issued a document that required the majority of State-owned enterprises under the supervision of the central government to exit from the real estate sector. However, seven years have passed and SOEs are increasingly active in the realty market. Beijing News comments:

During 2016, real estate prices in metropolises such as Beijing and Shanghai continued to rise. One after another, new plots of land fetched record prices at auction. That in turn has pushed property prices increasingly higher because the cost of the land accounts for a large proportion of a development's price.

Some analysts have blamed central SOEs because they purchased over half of the "land king" plots. That might have its own logic, but the job now is to analyze how it happened. Why did the SOEs rush into the realty market to buy land despite being restricted from doing so by the State-owned assets commission?