For all of Beijing’s actions to keep apartments affordable – higher interest rates, tightened lending and taxes and restrictions from Shanghai to Guangzhou – it does not really want prices to fall. Anyone wondering why should consider Hong Kong stock number 230: Minmetals Land (MML). This midsized developer is a perfect illustration of the deep conflicts in China’s housing policy.

Eight years ago MML was trading (badly) as ONFEM Holdings, specialising in curtain walls and window frames. It then became a subsidiary of the state-owned China Minmetals Corporation (MMC), the country’s largest trader of base metals. Since then, thanks to regular infusions of assets and capital from its unlisted parent, it has built a property portfolio across the Pearl and Yangtze River Deltas, and in the Bohai Rim. That MML is not terribly good at development – it seems to take longer than many privately owned peers to convert assets to cash – is irrelevant. The point is that MMC, along with at least a third of China’s centrally-administered state-owned enterprises, has direct and material interests in real estate.

It is well known that China’s millions of amateur property speculators want prices to stay strong. With corporate bonds and overseas stocks off-limits, and a one-year bank deposit now paying almost three percentage points less than the rate of inflation, property is the only available asset class with a fighting chance of delivering positive real returns. But China Inc, too, is long property. It is thus little wonder that the latest data show investment in real estate development rising by 32.9 per cent in the first half of this year, compared to the same period in 2010, while commercial and residential property sales were up 24.1 per cent. Reforms to keep the sector from overheating still further are, and will remain, halfhearted.