China Travel Deals, China Tourist, China Vacation, Chinese Travel

According to a report published August 15 by the popular Bank of China, under the influence of the fast rise of the price of lodging and the valution of the renminbi, of the outside funds have been introduced by various means on the real estate market of Shanghai and Beijing.

Him " Financial report 2004 on the real estate sector of China" published by the popular Bank of China reveals that these outside funds entered notably on the real estate market by four ways by the entry of funds coming from non residents and by the collection of mottos to buy some lodgings.

According to an investigation of the popular Bank on the financial market, the rate of outside funds in Shanghai passed of 8.3% of the total funds reserved to the purchase of lodgings to the first quarter 2003 to 23.2% to the fourth quarter 2004.

The numbers of the subsidiary of Shanghai of the popular Bank of China show that of January to November 2004, the global amount of outside funds on the real estate market of Shanghai passed 22.2 billion yuans, either a rise of 13.5% in relation to 2003;  among them, the amount destined to the real estate financing was of 15 billions of yuans, either 12.8% of the amount destined to the real estate exploitation of the previous year;  the foreign funds destined to the purchase of lodgings were of 7 billions of yuans.

The outside funds are destined to the purchase of houses mainly to elevated prices, for example of the villas and the apartments of luxury. According to statistics, during the first two months of the year 2005, the outside funds destined to the purchase in Shanghai of new lodgings to a price of 11 000 yuans/m2 and the surface of these increased 47.6% and 73% respectively in relation to the same period of the previous year, whereas funds destined to the purchase of second lodgings hand to an equal price and the surface of these increased of 2.8 times and 3.1 times.

According to the national administration of the foreign currency, China pays attention to the speculation at the time of the entry of funds. She underlines that it is necessary to make sure to those that buy some lodgings in China with foreign funds but in a speculative intention. Let’s mention a purchaser’s case for example come of the stranger who is carried itself purchaser in an inshore city of about ten and even of about hundred apartments;  it is there about a distinctly speculative man.uvre.

The report shows that the introduction of outside funds on the Chinese real estate market can be achieved by other ways:  first, to create the society of real estate investment to foreign funds or to detain actions of a Chinese society of real estate management. In 2004, the amount of foreign funds used in this domain for the whole country reached 22.82 billion yuan, either an increase of 34.2% in relation to the same period of the previous year, representing 1.3% of the sources of funds destined to the real estate exploitation.

Secondly, to invest directly while buying the obligations of societies of real estate management or buildings thanks to intermediate real estate societies to foreign funds, then to resell them.

Third, the banks to foreign funds grant some loans to the societies of real estate management and to the individuals. In him " Financial report on the real estate sector of China", the popular Bank reveals that it considers considering the region where the real estate market is topic to the rise of price like pilot region submitted to the control while examining the circulation of the outside funds destined to the speculation on the purchase of lodgings.

Betting on the valution of the renminbi, these last years, the speculators come in China to buy with a great deal of outside funds from the lodgings to Shanghai and in Beijing, spent to pocket money while taking advantage of this one. According to some sources, after having learned the news of the reform of the exchange rate published by China, the foreign business men get ready to seize luck to speculate on the purchase of lodgings in Shanghai while using outside funds and while outbidding the prices. The real estate sector is at present prosperous in appearance, but it harms to the improvement of the investment conditions; it also constitutes a serious risk for the financial organisms, the enterprises and even the individuals. Once the burst bubble, it will cause an enormous loss.