China State Construction Engineering Corp (CSCEC), the country's largest homebuilder, plans to inject 4.42 billion yuan ($647.53 million) into one of its subsidiaries involved in property development in China, less than two weeks after the central government ordered 78 State-owned enterprises (SOEs) to exit from the overheated housing market.

According to a statement filed by CSCEC on the Shanghai Stock Exchange Tuesday, the company has decided to change the purposes of part of the funds it raised in its initial public offering (IPO) last July, and use the money to boost the registered capital of China Overseas Holdings (COH) to HK$5.6 billion ($721.26 million).

COH is the parent of Hong Kong-listed China Overseas Land and Investment (COLI) and China State Construction International Holdings. Both are leading companies actively involved in real estate development in Hong Kong, Macao and the Chinese mainland.

The National Business Daily cited unnamed industry experts as saying Wednesday that such a move might suggest CSCEC was preparing to take over some profitable projects left by the 78 central government controlled SOEs.

Meng Qingyu, board secretary of the construction company, declined to comment when contacted by a reporter.

On March 18, the State Asset Supervision and Administration Commission (SASAC) ordered the 78 SOEs whose core businesses are not in the real estate sector to quit the market and later required them to come up with exit plans by mid-April.

CSCEC is one of the 16 central SOEs which are being allowed to stay in the real estate market.

Yin Bocheng, director of the Real Estate Research Center of Fudan University, said it is inevitable that the remaining 16 companies will form even larger monopolies, as there is no ban on SOEs' expansion in the market.

Yin said the SASAC's requirement would eventually prove to be a flop in cooling the red-hot property market, because the root problem lies in the land auction mechanism that only allows the top bidder to get plots.

Land is a scarce resource in China's highly populous urban areas.

Zhou Tianyong, vice director of the Research Department of the Party School of the Central Committee of the CPC, said the reason it is hard to ban SOEs is that the government has no clear definition of what these companies can do and what they cannot do.

As a result, he said, "They are almost omnipresent."