| China is the largest Nation on Earth with a | | | | resulting in a number of property bubbles. |
| population of over 1.3 Billion people and is | | | | |
| also the Worlds oldest civilization with a | | | | The Chinese government were forced to |
| culture going back 6,000 years. Situated in | | | | introduce new legislation in 2005 aimed at |
| and comprising the majority of Central and | | | | curbing short term / speculative investment |
| East Asia, it comprises two states: The | | | | in the market place. This resulted in |
| Peoples Republic of China (including Hong | | | | residential property prices falling by an |
| Kong and mainland China) and the Republic of | | | | average of 15% in 2005, with many of the |
| China (including Taiwan). Between them they | | | | short term investors forced to sell |
| border a huge number of Asian countries | | | | properties at less than market price. While |
| including Russia, India, Bangladesh, Vietnam, | | | | the short term investment concerns have been |
| Burma and North Korea. China is vast and so | | | | dampened in the short term, there is still |
| is the choice of where to make an investment | | | | great value and opportunity on a longer term |
| in China property. | | | | basis - with the government committed to |
| | | | steadier long term growth, rather than short |
| Culturally and politically China was ruled | | | | term volatile price fluctuations. |
| for many millennia by successive dynasties, | | | | |
| including the Han, Liao, Jin, Ming, Tang and | | | | Why invest in Property in China |
| Qin dynasties. During this period, the four | | | | |
| great inventions of China came into being and | | | | As overseas investment continues to pour into |
| affect the lives of everybody: Paper; | | | | China, it is interesting that the government |
| Printing; The Compass and Gunpowder. | | | | is looking to take a greater control of the |
| | | | economy. Conscious that an over heating |
| The Qing Dynasty ended in 1912 with the | | | | economy is a recipe for medium to long term |
| Republic of China. This was a time of great | | | | disaster, a number of regulations were |
| upheaval for China and was dominated by in | | | | introduced to slow down what could become an |
| fighting before unification in 1928 under the | | | | out of control situation. |
| Kuomintang government. This was disrupted | | | | |
| again by the intervention of foreign powers | | | | While the economy is strongly aligned with |
| and World War II, leading to the defeat of | | | | that of the US, there are three major reasons |
| the Kuomintang and retreat to Taiwan and the | | | | for the continued prosperity of the area and |
| establishment of Communism as the dominant | | | | for property in China :- |
| force politically, hence, the two countries | | | | |
| and differing political structures. | | | | Overseas Investment |
| | | | |
| Geographically, mainland China is very varied | | | | As long as the Chinese ruling party continue |
| but consists of large mountainous regions, | | | | to encourage overseas investment, the economy |
| alluvial plains, a vast coastline and the | | | | will continue to grow at a steady pace - |
| great Mongolian plateau. The two great rivers | | | | currently forecast at between 5% and 8% per |
| of the Yangtze and Huang He dominate the | | | | annum. Cheap labor, available property and |
| farming communities as they built along the | | | | under developed employment regulations add |
| shorelines. | | | | further to the attractions for overseas |
| | | | investors. The fact that many products are |
| Language is diverse but the most common | | | | shipped to China for assembly, then shipped |
| dialect is Mandarin but others include | | | | back to their country of origin further |
| Cantonese and Shanghainese. Mandarin is | | | | highlights the difference in labor costs. |
| considered to be the language to learn as it | | | | |
| is understood by the largest number of people | | | | World Trade Organization |
| verbally and is the only widely-used written | | | | |
| language. | | | | The fact that the Chinese government have |
| | | | decided to join the World Trade Organization |
| Although, due to Communism, the majority of | | | | offers valued security and confidence to many |
| Chinese people consider themselves to be | | | | investors looking at the Chinese market. The |
| Atheist a large number also consider | | | | strict regulations and condition associated |
| themselves to be Buddhist, Confucianist or | | | | with membership of the WTO ensure an open and |
| Taoist. Because of the dominance of | | | | fair trading relationship (the lack of |
| Confucianism in imperial China it still has a | | | | openness had been of concern for many |
| major influence on the customs and values of | | | | investors prior to recent years). |
| the modern population. Also very influential | | | | |
| was the long-standing Communist leader, | | | | Infrastructure Spend |
| Chairman Mao Tse-Tung, who took office in | | | | |
| 1945 and led the party until his death in | | | | While it would have been easy for the Chinese |
| 1976. His philosophy and legacy may have been | | | | authorities to accept new investment, without |
| tainted by accusations of despotism but his | | | | developing the country's infrastructure, much |
| dominance is beyond doubt. | | | | of the inward investment and increased |
| | | | economic growth has been re-invested into |
| Modern China has tried to move forward and | | | | developing the aging transport and services |
| embrace some forms of Capitalism and trade | | | | sector. The fact that much need services and |
| more openly with the rest of the World, to | | | | transport facilities are now available |
| the point where it is anticipated that it may | | | | increases the potential investment |
| become the Worlds largest economy. As a | | | | possibilities in the more rural areas of the |
| country of immense history it holds great | | | | country, which can have a major impact on |
| interest for the traveller and its growing | | | | local economies. |
| economy make it an investment hot-spot. | | | | |
| | | | Outlook |
| Property in China | | | | |
| | | | As the country continues to embrace the |
| For many years the property market in China | | | | ideals of overseas investment, while |
| was not open to overseas investors although | | | | retaining strong influence on the local |
| this began to change as the ruling party | | | | inhabitants, the economic situation looks |
| realised that they would need to attract | | | | better than it has been for many years. The |
| outside investment and business to rejuvenate | | | | strong alignment with the strong US economy |
| a very stale and stagnant economy. After | | | | adds further strength to the growth story, |
| building up closer relations with some of the | | | | which after a period of relatively low |
| powerful western companies, there was a | | | | control, is now strongly influenced by |
| natural progression from commercial property | | | | legislative changes introduced by the |
| investment to residential property in China. | | | | authorities. The fact that the authorities |
| | | | are willing to intervene to avoid a boom and |
| As the residential property market began to | | | | bust scenario adds further stability. |
| develop, initially because of overseas | | | | |
| investment and interest from non-nationals, | | | | The location of the country, and influence |
| there was a major increase in activity. In | | | | over the Far East region ensures that China |
| the more popular areas of the country such as | | | | will remain at the forefront of international |
| Shanghai and Beijing, the presence of | | | | trade for some time to come. Perfectly |
| multi-national business has swamped the | | | | situated for access by sea or land, and |
| residential market with companies willing to | | | | surrounded by some of the most important |
| pay a high price to house key members of | | | | trading partners in the world, China is well |
| staff. In the few years prior to 2005 this | | | | positioned to take advantage of the country's |
| created a number of property hot spots, | | | | growing presence in the world market place. |