Jiang, D., Chen, J.J. and Isaac, D. (1999) Real estate and foreign investment in China. Journal of Financial Management of Property and Construction, 4 (1). pp. 75-87. ISSN 1366-4387

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Abstract

This paper discusses the development of real estate indust7y in China in recent years. It argues that Hayek's theory of economic fluctuations can help to explain the contraction of the real estate market in 1994 in China as a whole. However, as a theory of the closed economy, Hayek's theory is found to be no longer robust when applied to cities where there is heavy foreign direct investment, such as Shanghai. We believe that it is the foreign direct investment that is making the real estate industry in Shanghai perform well, despite the government's tight monetary policy and the contraction of the industry in other parts of the country over the same period. The paper also argues that, while most of foreign investment in real estate is classified as direct investment, it is very different from "typical" foreign direct investment except in form and in fact shares most of the characteristics of portfolio investment. Foreign direct investment in real estate reflects the imperfections of China's capital markets.

Item Type:	Article
Uncontrolled Keywords:	capital markets, Chinese real estate, foreign investment
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Pre-2014 Departments:	School of Architecture, Design & Construction School of Architecture, Design & Construction > Sustainable Environments Research Group
Related URLs:	Publisher Organisation
Last Modified:	14 Oct 2016 09:15
URI:	http://gala.gre.ac.uk/id/eprint/5895

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