Hainan Province real estate development repeatedly crossed red line, and this is related to the interest mechanism. In July 2006, Hainan issued relevant regulations: the remaining net income after deducting the land development cost from the land transfer income shall be determined according to the ratio of not less than 30% of the income earned by the municipal and county governments to the share of the main developer. This means that tier one developers can get up to 70% of the net income of the land. It is because of this low-cost development model that a large number of large-scale enterprises rushed to Hainan to grab the land.