[photopress:Robert_Lie_Ing.jpg,full,alignright]Again and again attempts are made to tighten the ease of foreign investment into China’s real estate market. These moves do have an effect. But nowhere near what is, perhaps, expected.
Yet again a stricter approval process will be applied to foreign investment into China’s real estate market, especially in the high-end sector.
A notice, published by the Ministry of Commerce (MOFCOM) and the State Administration of Foreign Exchange (SAFE), will give the MOFCOM the final say in deciding whether to approve a project. The notice will also give the MOFCOM a better idea of the scope in China’s property market, experts say.
According to the notice, all foreign real estate companies that have been approved by the local government must also be put on the record of the Ministry of Commerce in the future.
The notice also imposes a very strict threshold on foreign investors’ application to set up real estate companies. Only those who already have land-use rights and own property can establish real estate firms.
The notice asks local bureaus to stop the practice of foreign investors taking over local project companies.
Will it work? There are doubters. Robert Lie, CEO of ING Real Estate Investment Management Asia, (shown above) said ‘Foreign investors are attracted to the strong growth prospects of China’s real estate market. The opportunity to develop new real estate to cater to the rapid growth of increasingly affluent urban populations is a compelling one.’
Robert Lie said that China is becoming an increasingly important part of the global real estate market. He said, ‘As it grows and becomes more transparent, China’s real estate market will become an essential part of an international investor’s portfolio.’
Also worth noting that although there is rising foreign investment, China’s property market remains mainly domestic-driven, with 95% of total investment coming from local parties.
Source: People’s Daily Online