Shanghai has relaxed the rules on foreign investment in commercial real estate. Foreign buyers are no longer required to have a registered business in China, and can use foreign currency to pay deposits on their bids.
Successful foreign bids for land purchases still need approval from the State Administration of Foreign Exchange and other ministries.
This may be a re-reaction to the fact that the cooling off measures brought in by the government worked particularly well in Shanghai where, in the first quarter of this year, contracted foreign investments plunged 31.1% from a year earlier to $612 million.
It is a balancing act. If the rules are eased then the massive investments may surge back. China imposed limits on foreign investment in the domestic real-estate market in July 2006 to quell speculation and ruled that overseas developers that intend to invest in non-residential properties have to establish foreign invested companies in China.
Foreigners are not allowed to buy homes or apartments in China until they’ve been in China at least a year. In a sense this is govermental balancing. There is, as yet, no indication that the right balance has been reached.
Source: Shanghai Daily