X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the debt and equity markets, click here.)

BEIJING-The Chinese Government has released proposed rules to limit foreign investment in real estate as part of a package of measures intended to cool the surging economy, the official news agency of the government says.

The government has tried to rein in an investment boom by raising interest rates, tightening lending rules and banning some construction projects outright. Officials are concerned that excessive spending on assets could fuel inflation or cause financial problems for banks if deeply indebted borrowers default on loans.

Under the new rules, foreigners would face “restrictions on residential property purchases,” the Xinhua News Agency says, without giving details. It says developers would be required to invest more of their own money in projects to reduce heavy borrowing.

The rules are meant to “improve the efficiency of using foreign investment,” Xinhua says. It didn’t say when they would take effect.

China has had limited success in attempts to control frenzied building of factories, luxury apartment and other projects that have turned its cities into massive construction zones. Figures released by the government last week showed the number of new construction projects jumped by 22.2% in the first half of the year, fueling an 11.3% rise in economic growth in the second quarter, the highest rate in a decade.

Investment from Hong Kong and other sources outside China’s mainland has poured into real estate. Investors hope to profit from rising prices and an anticipated rise in China’s currency which would push up the value of mainland assets in foreign currency terms. The government raised interest rates in April, and economists expect another rise in response to the latest announcement of strong growth figures.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt. Multifamily Spring 2022 (Formerly APTS)Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.