China Business

Apr 26, 2006

Foreign property investment eyed warily

SHANGHAI - China's State Administration of Foreign Exchange (SAFE) is paying close attention to the sharp increase of foreign investment in the country's real estate sector, the Shanghai Securities News recently quoted Sun Lujun, deputy director of SAFE's Capital Account Administration Department, as saying. The SAFE has already noticed the phenomenon and is studying it, according to Sun.

A few days earlier, spokesman of the National Bureau of Statistics Zheng Jingping also said it is necessary to make

"appropriate adjustments" of the policies concerning foreign direct investment in the real estate field.

On April 22, Xia Bin, director of the Finance Institute under the Development Research Center of the State Council, also called for keeping alert regarding foreign investment in the real estate sector. Experts here hold that foreign investment in real estate is by nature financial investment (ie, speculation), rather than foreign direct investment (FDI).

Expectations for strong appreciation of the yuan are believed to be the main cause for the sharp increase of foreign investment in the real estate sector. If the yuan appreciates against a foreign currency such as the US dollar, all investments denominated in yuan, including those in real estate, will appreciate by an equal amount in terms of that foreign currency.

(Asia Pulse/XIC)

China Travel

China Tours

Yangtze River Cruise

Great Wall of China

China Airline

Map of China

Head Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong Kong
Thailand Bureau: 11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110