Business News

Exit the Renminbi, Enter the ‘Pan’

Kathrin Hille in Beijing

Chinese property developers have discovered an alternative to the renminbi, China’s currency, as they begin to advertise prices in “Pan”.

Housing complexes in China
Jeff Hutchens | Getty Images

The new denomination is in fact a reference to Pan Shiyi, chairman of Soho China and one of the country’s most prominent property tycoons, used in a clever marketing trick that plays on public frustration with sky-high housing prices.

In a microblog post earlier this month, Mr Pan jokingly proposed that Apple should start offering phones for Rmb1,000 ($157) apiece. Such an offer, he said, would endear millions of Chinese to Apple and its recently deceased chairman, Steve Jobs.

Mr Pan’s suggestion generated an unexpected response from Tang Ruoding, a photojournalist. “When chairman Pan dies one day, could [Soho China] please also offer houses for Rmb1,000 per square metre, then more than a billion people will remember you,” Mr Tang wrote on his own microblog.

After both posts went viral, Chinese netizens came up with the idea of the new currency, with one pan shorthand for Rmb1,000 per square metre. Computer-generated pictures of pink banknotes bearing a picture of Mr Pan’s face and the issuer name “Soho China real estate bank” started appearing.

“This ridiculing of me is clearly a reflection of people’s dissatisfaction about the high property prices,” Mr Pan said in a video published by Soho China late last week.

This week the craze spread to the real world. Tianjin Jinpu Weiye Realty began marketing apartments in its Ecological Bay condominium complex priced in Pan. It also sent out text messages declaring: “Hot sales all over the city, up for grabs from 8.8 Pan!”, or Rmb8,800 per square metre.

Wuhan Rongsheng Real Estate Development put up billboard advertisements promising that its flats could be had from “5 Pan”. “We are not offering any discounts on these flats, they are selling very well” said Yang Min, a saleswoman for the project.

Soaring property prices, along with food inflation, have soured the mood of China’s young and previously politically disinterested urban middle class.

“Our government’s economic policies are no longer good enough to help us improve our lives,” said Lei Jin, a young Beijing woman who graduated from university two years ago and is dissatisfied with her badly paid job as an office clerk. “It looks like I will never be able to buy a flat of my own.”

“Nationwide, the average price for a flat is now seven times the average annual household income but in Beijing and Shanghai it is more than 17 times,” said Du Jinsong, an analyst at Credit Suisse in Hong Kong. “That compares with about three times in the US.”

Mr Pan deleted his original blog post but to no avail. “Little did I know that after that people would re-tweet it even more crazily,” he said in the video. “Now that it has come to this new ‘currency’, no explanation will make any difference, so I can only keep silent.

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