Comments on: New guidelines for FDI creating confusion, uncertainty in real estate sector http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html Sun, 7 Sep 2008 23:18:28 +0000 http://wordpress.org/?v=2.3.2 By: Andy Scott http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-5975 Andy Scott Fri, 07 Dec 2007 08:27:05 +0000 http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-5975 Dear Andy, Based on your question, maybe yes, but also maybe no, it is impossible to tell without more information. I encourage you to contact the Beijing office of Dezan Shira & Associtates at beijing@dezshira.com for more information. Regards, Andy Scott Editor China Briefing Dear Andy,

Based on your question, maybe yes, but also maybe no, it is impossible to tell without more information. I encourage you to contact the Beijing office of Dezan Shira & Associtates at beijing@dezshira.com for more information.

Regards,
Andy Scott
Editor
China Briefing

]]> By: Andy http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-5910 Andy Thu, 06 Dec 2007 10:42:15 +0000 http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-5910 I bought two new residential properties in Beijing in 2006. They are just being completed now. The purchase was made (and money converted) prior to any changes being made in legislation. Does anyone know whether I am legally allowed to own the properties and what should I do- given now you must be in Beijing for a year and cannot speculate? some help would be much appreciated- I want to follow the laws and make sure I do everything correctly Andy I bought two new residential properties in Beijing in 2006. They are just being completed now. The purchase was made (and money converted) prior to any changes being made in legislation. Does anyone know whether I am legally allowed to own the properties and what should I do- given now you must be in Beijing for a year and cannot speculate?

some help would be much appreciated- I want to follow the laws and make sure I do everything correctly

Andy

]]> By: Beijingren http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-4840 Beijingren Fri, 16 Nov 2007 05:20:00 +0000 http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-4840 At least there's one consultant who doesn't go off on a wobbly every time China revamps its regulations. A well said and sensible position when elsewhere people lost their heads. Your right it has had little effect on the market. At least there’s one consultant who doesn’t go off on a wobbly every time China revamps its regulations. A well said and sensible position when elsewhere people lost their heads. Your right it has had little effect on the market.

]]> By: China and I http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-4812 China and I Thu, 15 Nov 2007 11:36:43 +0000 http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-4812 Hi Chris, I concur with you concerning the inflow of FDI in the real estate market, mostly money comes from Taiwan, Singapore and HK or Mainland Chinese through offshore companies. From first hand information I have, I can tell you large Hotel management companies are not only developing contract management but also building and managing their own Hotels. Accor is an example. Concerning pure real estate market, some American friends working American investors in China for some years now told me if implemented the new guidelines would be a killer for them. Currently, they have a wait-and-see approach on the situation. Time will tell! Concerning the decision in itself by the Chinese governement to "restrict" FDI in the real estate market, I agree it is a smart move and I was not surprised! Hi Chris,

I concur with you concerning the inflow of FDI in the real estate market, mostly money comes from Taiwan, Singapore and HK or Mainland Chinese through offshore companies. From first hand information I have, I can tell you large Hotel management companies are not only developing contract management but also building and managing their own Hotels. Accor is an example.
Concerning pure real estate market, some American friends working American investors in China for some years now told me if implemented the new guidelines would be a killer for them. Currently, they have a wait-and-see approach on the situation. Time will tell!
Concerning the decision in itself by the Chinese governement to “restrict” FDI in the real estate market, I agree it is a smart move and I was not surprised!

]]> By: Chris Devonshire-Ellis http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-4801 Chris Devonshire-Ellis Thu, 15 Nov 2007 06:19:31 +0000 http://www.china-briefing.com/news/2007/11/15/new-guidelines-for-fdi-creating-confusion-uncertainty-in-real-estate-sector.html#comment-4801 There has been a lot of ill-thought out nonsense doing the rounds about concerning this topic, and comment raised by a handful of US lawyers dealing in China, especially the impact on FDI in the real estate industry. The truth is: WHAT FDI in the Chinese real estate industry ? Much of it falls into four categories: 1) Chinese domestic investors; 2) Chinese investors round tripping by setting up companies in HK, Singapore, Mauritius etc to appear to be foreign investors to obtain the old tax incentives that used to apply to FDI in this sector; 3) Hong Kong property developers 4) Taiwanese property developers There has never been a huge influx of American or European money into Chinese real estate, it's a myth. Additionally, concerning hotels now being barred from FDI in the sector, as you point out, many are management contracts only and they do not usually own the property. So the new regulation does not affect them. The people that would be affected are the property developers in Hong Kong & Taiwan, and there are some major listed companies there, with significant China development portfolios. If it was a truly negatively viewed re-positioning of China's real estate policy concerning foreign investment into China (both Hong Kong and Taiwan investments into China are considered 'foreign') then you'd expect their share prices to slide. But they didn't move much, and some even went up. Andy just quoted Richard Van den Berg, managing director of ING Real Estate Investment Management in Hong Kong, and so shall I: "The Chinese governments position on land development or investment has been incorrectly interpreted by some observers as adding a new layer of restrictions on FDI in the mainland property market". I agree with that position. Comments on blogs elsewhere have been largely knee jerk reactions, albeit mainly written by foreign lawyers, mainly of whom have developed a "China is difficult" mentality through their work, which can be understandable. But that does not apply to this situation, and neither does it apply to the new labor law legislation. China's regulatory regime concerning FDI is moving very much in the right direction. And if the real estate developers in HK and Taiwan, who are most exposed to mainland China investments shrugged off the FDI property development reform with a "So what?" via share prices and local market sentiment, then why should American lawyers commenting on blogs get so upset about it ? There's far too much foreign negative opinion about when it comes to knee jerk reactions on Chinese legal or investment reform, and this lawyer, for one, has seen far too much before in China to get too excited about perceived restrictions when none actually exist. There has been a lot of ill-thought out nonsense doing the rounds about concerning this topic, and comment raised by a handful of US lawyers dealing in China, especially the impact on FDI in the real estate industry. The truth is: WHAT FDI in the Chinese real estate industry ? Much of it falls into four categories:

1) Chinese domestic investors;
2) Chinese investors round tripping by setting up companies in HK, Singapore, Mauritius etc to appear to be foreign investors to obtain the old tax incentives that used to apply to FDI in this sector;
3) Hong Kong property developers
4) Taiwanese property developers

There has never been a huge influx of American or European money into Chinese real estate, it’s a myth. Additionally, concerning hotels now being barred from FDI in the sector, as you point out, many are management contracts only and they do not usually own the property. So the new regulation does not affect them.

The people that would be affected are the property developers in Hong Kong & Taiwan, and there are some major listed companies there, with significant China development portfolios. If it was a truly negatively viewed re-positioning of China’s real estate policy concerning foreign investment into China (both Hong Kong and Taiwan investments into China are considered ‘foreign’) then you’d expect their share prices to slide. But they didn’t move much, and some even went up. Andy just quoted Richard Van den Berg, managing director of ING Real Estate Investment Management in Hong Kong, and so shall I: “The Chinese governments position on land development or investment has been incorrectly interpreted by some observers as adding a new layer of restrictions on FDI in the mainland property market”.

I agree with that position. Comments on blogs elsewhere have been largely knee jerk reactions, albeit mainly written by foreign lawyers, mainly of whom have developed a “China is difficult” mentality through their work, which can be understandable. But that does not apply to this situation, and neither does it apply to the new labor law legislation. China’s regulatory regime concerning FDI is moving very much in the right direction. And if the real estate developers in HK and Taiwan, who are most exposed to mainland China investments shrugged off the FDI property development reform with a “So what?” via share prices and local market sentiment, then why should American lawyers commenting on blogs get so upset about it ?

There’s far too much foreign negative opinion about when it comes to knee jerk reactions on Chinese legal or investment reform, and this lawyer, for one, has seen far too much before in China to get too excited about perceived restrictions when none actually exist.

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