Rule expected to fight 'hot money'
By Zhang Jin and Hui Ching-hoo (China Daily)
Updated: 2006-07-11 08:43 Last month, Lin Zheying, deputy director-general of the Ministry of
Commerce's foreign investment administration, was quoted by Bloomberg saying new
rules defining what type of overseas investors can buy property could be
announced that month.
A Xinhua report in April also said the People's
Bank of China (PBOC) would strengthen supervision and control over the flow of
"hot money" from overseas into the property market in some areas.
Li
De, director of the Finance Risks Division of the PBOC Research Bureau, said a
great amount of foreign funds had flowed into East China's housing market,
partly in speculation of a further appreciation of the yuan.
Hong Kong
newspapers said regulations may include tightened approval procedures and a
register of purchases made by overseas citizens, as well as a limit on the
number of properties they could buy and time restrictions on resale.
The
regulations, if implemented, will dampen overseas investors' passion for
mainland properties, said K.K. Lai, a director of Hong Kong's leading property
agency, Centaline.
The agency last week released a survey saying
Hongkongers have purchased 8,800 residential units on the mainland in the first
half of the year, with a total value of 4.7 billion yuan (US$603 million)
a year-on-year increase of 11 per cent.
In recent years, international
funds have also invested heavily in the mainland property market.
Morgan
Stanley has purchased five luxury projects in Shanghai since 2004, investing
more than 2 billion yuan (US$250 million).
JP Morgan recently set up a
US$4.2-billion international property fund, which mainly invests in
international property markets, with the Chinese mainland being a major
target.
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