"More than 180 billion yuan (US$21.69 billion) in assets are expected to be involved in the reshuffle, in which my company will become a major player to absorb real estate development wings of other companies," said Meng Xiaosu, chairman of the China National Real Estate Development Group Corp (CRED), China's largest State-owned real estate developer.

Earlier this month, the State-owned Asset Supervision and Administration Commission of the State Council (SASAC), the biggest boss of SOEs, issued a document suggesting that most of the 192 State-owned conglomerates which are not focused on real estate development to transfer their property development businesses to five State-owned professional developers.

The five include CRED, Shenzhen-based China Merchants Real Estate, China State Construction Engineering Corp (CSCEC), China Poly Group Corp, and Shenzhen-based Overseas Chinese Town Group.

China Merchants Real Estate belongs to Hong Kong-based conglomerate China Merchants Group while CSCEC has a strong real estate development, Hong Kong-listed China Overseas Property Development Co Ltd.

The document is stressed not as an administrative order and the reshuffle should be voluntary.

SOEs can consult with the five property giants and SASAC will co-ordinate the negotiations.

Guo Guorong, a senior researcher with SASAC, said that about 80 per cent of the 192 central government-owned conglomerates have their own real estate development businesses.

Many of these businesses are not strong and some of them are even losing money. Reshuffling minor property businesses to leading professional State-owned developers will be beneficial to the efficiency of SOEs.

Wang Runqiu, an official of SASAC responsible for the reshuffle, was quoted by 21st Century Economic Herald as saying that considering the current credit and land supply tightening, the reshuffle will help many State-owned conglomerates reduce risks of financing and development.

Wang Xiaoguang, a senior researcher with the Institute of Economics under the National Development and Reform Commission, said that time is ripe for China to form a group of leading real estate developers. They can help the health development of the property market.

"All recombinations should be done through negotiations, share holding, asset exchange, and other market ways. Otherwise the reshuffle will lose its significance of reforming SOEs," Wang Xiaoguang told China Business Weekly.

But it is not an easy job.

Many State-owned conglomerates are reportedly reluctant to give up their real estate development businesses.

An official with COSCO Real Estate Development Co Ltd, a subordinate of the shipping giant China Ocean Shipping Company (COSCO), echoed those voices last Thursday at a ceremony to rank China's blue-chip real estate developers.

"Although we are invested by COSCO, we have been a successful and professional developer," the official told China Business Weekly, refusing to be identified.

The logic behind the words is obvious. COSCO Real Estate Development is a professional developer and should not be merged by others with the pretext that it is unprofessional.

Meng said CRED has been negotiating with China Huaneng Group, the power giant, to receive the latter's real estate development wing. Company sources said so far some other State-owned conglomerates have shown their intention, but no other formal negotiation was launched.

Although the property development businesses of some SOEs are not very profitable, it is not easy for them to give up the business, because huge and complicated problems of personnel, asset and brands are concerned, experts say.

If the reshuffle is done through market operation, it is clear that none of the five privileged developers have enough resources to buy, merge or acquire all the property development businesses of other conglomerates. But it is also obvious that no one would transfer their property development sector at a low price, Wang Xiaoguang said.

Except CRED, the other four privileged enterprises seems less enthusiastic.

He Jianya, deputy general manager of China Merchants Real Estate, told China Business Weekly last Thursday at the blue chip ceremony that his company would not easily receive real estate business from others.

All business transfers should be done in market ways and be helpful to China Merchants Real Estate.

Unlike CRED which is eager to expand, the four privileged developers have their stable businesses and revenues and they are wary of accepting bad real estate development assets from other SOEs, said Cao Shengjie, a reporter of the popular newspaper Economic Observer who first reported the SOE reshuffle news.