China’s real estate sector has a chilly winter ahead, said Pan Shiyi, chairman of Beijing property developer SOHO China Ltd. And he had interesting, alphabetical way of describing it.

“I look at the shape of the real estate market and I imagine it bottoming out as a letter “L”. If after the snows earlier this year, China had loosed up its monetary policy, we would have seen a “V”-shaped market. If they had loosened up before the Olympics, we would have seen a “U”. But for them to release new policies now, like reducing the interest rate, it’s already an “L”. I don’t know when the market will come back up.”

More pressure will come to bear on Beijing’s property market, especially the market for lower-end, residential units, as projects built on land released for development in 2007 are completed, Pan said, speaking at the Reuters China Summit in Beijing on Thursday.

“Most developers are building common, residential units. As these units come onto the market, they will deal it a huge hammer blow,” Pan said, adding that China’s policy since late-2006 of promoting the construction of residential units of less than 90 square meters would soon be felt.

“This year in the fourth quarter, the effect of this policy will hit the market and reshape it…. The price pressure will be biggest first on real estate outside the fifth ring road, second on units 90 square meters and below, and lastly on those priced at 8,000 a square meter or more.”

By Lucy Hornby

The Reuters China summit in Beijing had two internet executives speak about their business. Kevin Wang, CFO of software maker Kingsoft, and Charles Zhang, the chairman and chief executive officer of Sohu.com Inc. both discussed growth and weathering the financial storm. The companies they lead have some similarities and differences, but both are seen as being less exposed to market fluctuations because after all, a lot of their business is based on people going to their computer, sitting down, and logging onto the internet.

So how do they expect to grow their businesses? Not through acquisitions, both executives said, at least for the time being. They seemed to be happy to grow by beefing up their existing operations and partnerships. Or, as they in executive speak, they’re content to keep growth “organic.”

“We’re very cautious on acquisitions,” Zhang told Reuters at the summit. “We’re still looking, but there are not very many candidates. So I’d be very careful,” before seeking to purchase a competitor or peer, he said.

Ditto for Wang, who spoke of the 300 independent game studios in China sitting out there, with “very little chance” that they’d all survive as independent entities.

That doesn’t mean Kingsoft is in a buying mode, according to the CFO, who said that his company is not interested in taking any of them over at the moment.

“Well insulated” China, though suffering from sharp drops in its own equities markets, doesn’t have the sense of crisis that exists in the U.S., says Philip Partnow, managing director of UBS Securities Ltd in Beijing. UBS, the first Western bank to assume management control of a domestic mainland brokerage, points out the fact that what’s hitting companies is not subprime-related securities gone bad.

“I think there’s nothing here we feel is toxid,” he told Reuters on Wednesday at the Reuters China Summit in Beijing. He goes on:

“The Chinese capital market has responded quite differently than global capital markets and that is because the Chinese capital markets are still pretty well insulated by the way China controls the RMB and by the other financial controls that China has.

“It is true that both the Shanghai A-share market and the Heng Seng market have fallen quite steeply, but that is more in response to a correction from what many people believe was an over-inflated stock bubble, rather than a direct response from some financial crisis or concern. That’s been then followed on by some concerns that people have about a weakening economic sentiment in the U.S. and Europe and Japan, which are China’s key export markets, and what the knock-in impact will be in China. So there is also a fundamental concern.”

“But there is not a sense of distress or of crisis, or that things that people thought were valuable suddenly vanishing into thin air, along the same lines of what we’ve seen with some of the things that were happening with Subprime and the complex structures that were set up around the subprime, back in the United States. So I think there’s nothing really that we feel that is toxic, out here in China, so we are broadly comfortable with the businesses that we’re in. “

By Lucy Hornby

How many jobs will be cut from the ISE takeover by Deutsche Bourse and SWX Swiss Echange? Not many, ISE’s CEO says.

David Krell, CEO of the International Securities Exchange Inc. (ISE), said at the Reuters Trading and Exchanges Summit that only a “few” of the company’s 222 employees would likely go as the result of ISE combining with Deutsche Bourse and SWX for $2.8 billion (pardon the heavy typing on the sound clip.) Krell indicated that likely to go would be the folks handling the “public company” side of the business, since, well, ISE will no longer be public if the deal goes through. (Photo; Company website).

Where is Thain headed when the time comes for him to hand over the reins at the NYSE Euronext? Not Congress, he says.

CEO John Thain, speaking at the Reuters Exchanges and Trading Summit, said that he “stupidly” said his job at the NYSE would be a three to five year stint when he first took over. Thain sounded like he wouldn’t mind staying on longer. And when asked about life after the exchange, the former Goldman Sachs banker ruled out one option: Elected office.