1. 4. A Look at China
Page 57

2. Geography
Page 58

3. 12th Five Year Plan Inclusive growth Restructure the economy
Reduce social inequality
Protect the environment
Strategic Emerging Industries (SEIs)
Page 60

4. Tracking energy consumption per unit of GDP
Holding local governments accountable for meeting green development targets
Tracking energy consumption per unit of GDP
Reducing emissions with “blue sky day” targets
Greening of China
Page 61

5. 7 Strategic Emerging Industries
Biotechnology
New energy
High-end equipment manufacturing
Energy conservation, environment protection
Clean-energy vehicles
New materials
Next generation IT
Page 61

6. FDI $776 billion FDI in China $332 billion Chinese FDI Abroad
China Investment Corporation— $3.2 trillion
Guanxi
Page 47

7. Rising Renminbi? When will the renminbi achieve hard-currency status?
Renminbi-denominated international deals
Capital flows freely in and out
Foreign banks hold reserves
Free-floating, fully convertible
Could reshape the world’s financial markets
Unleash individual and sovereign wealth
Page 65

8. Renminbi-denominated bonds
Avoids government restrictions on foreign debt, but government controls
Invest in China and Hong Kong-based companies
Fixed-asset investments only
Dim Sum Bonds
Page 66

9. Real Estate in China Government owns all land, grants leases
Regulations emanate from national level
Provincial and local implementation can vary considerably
Page 66

10. Cooling the Market Market swings Government action to cool market
Fear of real state bubble
Home buyers priced out of market
Widespread dissatisfaction with property prices
Competition from speculators
Government action to cool market
Page 67

11. Government Actions 1st home—30 % down payment
2nd home—60% down payment
3rd home—no mortgage financing
Developers cannot bid on more land if already own idle land
Overseas residents one home for own use
Hong Kong—additional Stamp Duty
Page 67

12. Financing Many cash deals Age limit on mortgage borrower—65 years
Minimum interest rate—1.1 times People’s Bank of China benchmark rate
Seller must pay off mortgage before the property can be sold
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13. Land Rights Allocated for a specific purpose
Granted
Land Rights
Allocated for a specific purpose
Cannot be sold, transferred, pledged, or mortgaged
Granted for residential or commercial purposes
May be pledged, mortgaged, leased, inherited, and transferred
Renewable leases
70 years residential
50 years industrial
40 years commercial
Renewal regulations TBD
Major source of revenue for local government
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14. Rental Property Pro-landlord
Regulated by local governments, no national laws
2–3 months rent security deposit
No automatic renewal
Landlord can terminate at any time
No subleasing
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15. Can Foreigners Own Real Estate in China?
Work or study in China for more than a year
Personal residence, cannot be rented out
One house only
One non-residential property for business
Property held less than 5 years subject to 5.5% tax on entire transaction
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16. Real Estate Professionals in China
Sales agents must be licensed
National Ministry of Construction oversees
Open listing real estate market
Negotiable commissions paid by the seller
Agents do not share property information
Agencies post listing on own web sites
Storefront real estate firms
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17. The Big Story Chinese Buyers Abroad
Inflation hedge
Income from rentals
Safe haven investments
Avoid ownership restrictions
Build a family legacy
Education for children
Future emigration, career development
The Big Story Chinese Buyers Abroad
Page 47

18. China’s Millionaires 1 million+ millionaires Sources of wealth
55% private-business owners
20% property speculators
15% stock market investors
10% high-salaried executives
Prefer real estate investment
4 of 5 wealthy parents want to send children abroad for studies
To English-speaking countries—USA, UK, Canada
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19. What Does This Mean For You?
New and growing stream of business
Establish and maintain a robust referral network
Professionalism, reliability, trustworthiness earns repeat and referral business
Graduates may stay on to establish careers and build businesses
Page 47

20. Doing Business in China Beyond the Basics
Names
Connections— Guanxi
Women in business
Business cards
Meetings
Negotiations and contracts
Interpreters
Demeanor
Business dining
A few taboos
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