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China probes foreign investment in property

(BEIJING) China has launched a nationwide probe into foreign investment in the red-hot real estate market, state media said yesterday, while mulling new measures should existing limits prove ineffective.

The State Administration for Industry and Commerce at the end of November had ordered branches across the country to carry out the probes, the Shanghai Securities News reported.

It is a sign of problems in the enforcement of previous restrictions, the report said, citing an unnamed industry insider who participated in a recent government seminar on limits on foreign investment.

New tightening measures are highly likely to be introduced this year if the probes prove that existing limits were ineffective, the source added.

Foreign investment in China’s real estate market surged in 2007 despite a series of measures introduced since 2006 tightening approvals and stepping up supervision of direct foreign participation in the industry.

Latest official figures showed that the total value of foreign investment in the market soared by 71.9 per cent in the first 11 months of 2007 to 53.9 billion yuan (S$10.6 billion), stoking fears that a bubble may be emerging.

The State Administration for Industry and Commerce declined to comment on details of the investigations .


Source: AFP (Business Times 8 Jan 08)


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