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Over the past six months, more than 20 Chinese construction companies have undergone leadership changes, primarily driven by significant shifts in the real estate market that require company executives to adapt and improve their skills, according to industry insiders.
The latest example is a state-owned developer based in Shanghai, which announced a change in leadership on November 14, appointing Wang Wei to succeed the retiring Lu Jimin.
Other large and medium-sized state-owned enterprises, including China Merchants Shekou Industrial Zone Holdings, CCCC Real Estate, and Overseas Chinese Town Asia Holdings, have also seen their chairpersons replaced. Troubled developers that have undergone debt restructuring, such as Jinke Property Group and China Vanke, are among the companies that have made leadership adjustments amidst ongoing financial difficulties.
In addition to retirements, the recent leadership changes reflect a broader industry need to reshape managerial capabilities as the market transitions into a new development phase. Industry expert Liu Shui explained that this shift requires firms to move away from outdated models focused on land acquisition, rapid expansion, and high leverage with quick turnover. Instead, new leaders must better understand economic cycles, long-term trends, financial security, and possess the skills to establish effective financial management systems.
Furthermore, as the industry shifts from large-scale developments to more refined operations and asset-light models—such as construction management and property services—companies are also introducing new leadership to navigate these changes.
The pressure to improve operational performance is another significant reason behind leadership changes. Since 2022, many firms have experienced declining results, with over 60% of listed builders reporting losses in the first half of this year, Liu noted.
The overall real estate sector has undergone deep adjustments over several years, profoundly impacting sales and profits. As a result, companies must recalibrate their business models, according to Yan Yuejin, vice president of the Shanghai E-House Real Estate Research Institute.
Yan emphasized that organizations need to restructure and update their senior management teams to remain competitive in the evolving market. This often involves not only regional or key business leadership but also the strategic infusion of talent with comprehensive management experience from outside the industry.
Given the current market challenges, managers are expected to demonstrate high levels of professionalism and strategic adaptability. New leadership must excel in market analysis, product development, marketing, digital technology, and business transformation, Yan highlighted.
Data from Wind Information reveals that the combined earnings of chairs at 78 publicly listed developers in Shenzhen and Shanghai decreased by 16% last year, totaling CNY69.4 million (around USD9.8 million), reflecting the broader downturn in the real estate industry.
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