Shanghai's property developers are flocking to Harbin to exploit the under-developed housing market in this provincial capital of the country's far northeast.
The two cities inked two real estate development cooperation contracts yesterday in Shanghai, with a total investment value of 5 billion yuan (US$605 million), Eastday.com reported.
Since last year, many domestic firms have been increasing their investment in Harbin's housing market, according to the mayor Shi Zhongxin.
He said companies which include Shanghai AJ Corporation and Dalian Wanda Group have invested billions of yuan in various developments there.
To encourage more investors, Harbin has introduced favorable policies and held discussions with over 10 developers and firms from Shanghai and also neighboring Russian and South Korean concerns.
Benefiting from the country's strategy to revitalize the industrial base of the Northeast region, Harbin has seen rapid growth in its social, trade, economic, technological and cultural sectors, recording an average annual growth rate of 20 percent in its fixed-asset investment over the period 2001-2004, according to Shi.
Over the same period, it attracted investment totaling 53.2 billion yuan, mostly in infrastructure, transport and housing-related projects.