[photopress:yixianrong.jpg,full,alignright]Yi Xianrong is the Director of the Research Office at the Institute of Financial Development and Financial Systems, a branch of the Chinese Academy of Social Sciences. Recently, in People’s Daily Online, he wrote a clarification of an article which appeared in the US magazine Business Week. The Business Week article said that China is becoming hostile to foreign capital and that China’s policy on foreign investment will change to reflect that attitude.
A heavily edited summary of what Yi Xianrong wrote to correct that view:
‘Members of the foreign press and industry leaders have contacted me, asking whether China will abandon the policy of reform and opening up that has been in place for the past 20 years. I immediately allayed their concerns. Restricting the flow of foreign capital into the real estate market is not a policy unique to China. China is by no means the first country to introduce this measure.
‘In socialist China, investment in the real estate market is aimed at meeting and improving people’s basic housing needs, rather than wealth appreciation. The Chinese government is justified in their decision to restrict foreign investment in real estate speculation.
‘Some people believe that restrictions on foreign capital entering the Chinese real estate market will have little effect. In my view, however, these restrictions send a clear message to foreign investors; they will have to take a lot of risks if they want to enter the Chinese real estate market.’
Source: People’s Daily Online