Özet:

China’s real estate market has been an attractive destination for foreign capital since it initiated reforms to open its economy. The unprecedented expansion of urbanization, the expectation of currency appreciation, and China’s accession to the WTO have all intensified the trend for excessive foreign capital flowing into the sector. In particular, the cancellation of welfare housing since 1998 has created a new structure for the provision of housing, with a market mechanism, which requires real estate projects to be developed by private parties, and creates valuable opportunities for both domestic and foreign investors. This article will provide a general delineation of China’s real estate policies prior to the early 2000s, particularly the policies stipulated in the Foreign Investment Industrial Guidance Catalogues (FIIGCs) and specific domestic rules issued by the central and local authorities on foreign real estate investment. It is found that, among all of the restrictive stipulations, curtailing speculative investment is the primary, if not the only, regulatory target. A critical analysis illustrates the economic concerns that limiting the access of speculative investment into China’s real estate sector will threaten financial stability, foreign exchange stability and overall economic growth. This article is divided into three parts, the first part addresses the general policies on foreign investment under the FIIGC; the second part addresses the the development of policies specifically pertaining to foreign entities and individuals conducting real estate investment in China; the third part assesses the effects of the restrictive policies on speculative capital. The final part concludes.

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