外文翻译wto对中国房地产市场的影响

The Chinese Real Estate Market and the effects of WTO Chinas impending entry in the World Trade Organization (WTO) will be a blessing to the real estate industry in China which has had little to celebrate since the bustling days of the early-mid 1990s. WTO entry sends a positive message to foreign companies about Chinas commitment to economic and market reforms. Demand from foreign companies - the primary occupants of top-quality commercial, industrial and residential projects is likely to increase as new companies enter the market and others expand as restrictions are gradually lifted. It is, however, premature to say exactly how much the real estate market will benefit. To predict that WTO entry will mean rising rents and demand for more construction in the short term is, perhaps, misguided. The details of the agreement are not yet known, and it is likely that the impact will be gradual and unevenly spread amongst businesses and in different areas of China. Financial services, telecommunications, distribution and logistics, information technology, agriculture, and professional services industries, as well as Chinese consumers, are likely to be significant winners.Metropolitan areas may see benefits due to easing of restrictions on financial services companies. Banks and insurance companies are a major industry sector in these areas, and the lifting of restrictions on their activities could unleash significant latent demand for real estate as the reforms take hold. The lifting of trade restrictions, the lowering of tariffs and the easing of restrictions on distribution over the next five years will be a boon for warehousing, logistics and distribution real estate in Chinas busiest port city, as well as in the rest of China.While WTO entry may encourage a recovery in real estate markets sooner than otherwise expected, almost every major market in the country remains vastly overbuilt. In the office sector, the vacancy rate for Grade A buildings is presently 30% in Beijing and 38% in Shanghai. Based on recent trends in demand, this vacant office space will take two to three years to be absorbed, and there is more construction underway.China will continue to reap economic rewards from the comprehensive package of housing reforms that the central government has been continually introducing. The most recent development in the new policy is the replacement of monetary subsidies for welfare housing distribution. This new move builds on the 1998 directive, which ended the provision of subsidized housing to public servants. The reforms, coupled with an increased readiness on the part of banks to grant residential mortgages, are expected to promote the sale of housing and facilitate housing construction. While it is Chinese citizens who will benefit most from the housing reforms, foreigners may also have the opportunity to participate in the real estate boom. Foreign banks are seeking permission to compete in the huge mortgage market and purveyors of building materials, furniture, household appliances and interior design services are now honing in on the Chinese market. Any restrictions or conditions to which foreign companies are presently subject are likely to be relaxed or lifted completely upon Chinas accession to the World Trade Organization. This strong socialist principle of state ownership of real property has been somewhat circumvented by the introduction of land-use rights. A land-use right is created when the owner of the land (the State or a collective) separates one or more of the rights of possession, use and benefit from the complete right of ownership and grants them to another legal person. Land-use rights in practice are acquired by way of a grant or by means of allocation by the State. The rights exist for a definite term ranging from 40 years for commercial, tourist and recreational purposes to 70 years for residential purposes. The land-use rights holder may then exercise the rights granted, but the land must be used in accordance with the land-grant contract. An amendment to the Constitution in 1988 confirmed that the rights to the use of land may be transferred in accordance with law. Depending on the stipulations of the land-grant contract, and the extent of the rights granted the holder may have a right that is practically the same as ownership, albeit for a limited time. Thus, notwithstanding the socialist tenet that there shall be no private ownership of land, an ordinary Chinese citizen may legally own his house, and, in conjunction with an appropriate land use right, may for all intents and purposes own the land and everything above it. Accordingly, a Chinese real estate market that trades land-use rights coupled with the structures on the land has gradually evolved. Central to the new housing policies is the desire of the Chinese government to facilitate the purchase of housing by Chinese citizens. This deviation from traditional socialist principles is aimed at bringing about increased consumption, a broadening of employment opportunities and the renewed availability of government resources. Most provinces, autonomous regions and municipalities have already formulated schemes for the sale of public housing to individuals. To date, approximately 60 per cent of such housing has been sold nationwide. Political and ideological notions aside, the recent housing reforms have had vast economic ramifications. Chinas fledgling real estate market of the early 1990s has now blossomed: over the past two years, investment in real estate has been growing by 20 per cent per year. 401 billion Yuan was invested in real estate development nationwide in 1999. Housing construction has increased dramatically and it is predicted that at least 55 million square meters of floor space will be added year-on-year until 2010. In response to both government initiatives and market trends, banks will endeavor to increase the number of loans granted for real estate purposes. The balance of such loans by Chinas state-owned commercial banks reached 355.6 billion Yuan by the end of 1999. Commercial banks will also focus on making a greater amount of housing mortgage loans available to individuals in 2000. The projected target for such loans is 100 billion Yuan. The Peoples Bank of China has pledged to strengthen supervision of the granting of housing loans. The China Construction Bank has gone one step further than its competitors by announcing that the grant of housing loans in Chinas central and western areas will be accorded a special priority.Inevitably, the housing reforms are not free from all difficulties. The gradual evolution of a market economy in China has cracked the iron rice bowl. With the demise in prominence of state-owned enterprises and the rebirth of the private economy, Chinese workers can no longer expect lifetime employment. And now, with the introduction of a monetary subsidy, Chinese citizens can no longer bank on the security of welfare housing. Will this hold back any foreseeing boom?A real estate boom in China will inevitably fuel the national economy, providing indirect benefits to all foreign investors. But it is overseas real estate developers who are poised to reap the most gains, for they already enjoy preferential treatment by way of exemption from investment regulatory taxes, easy access to fund-raising and freedom to remit profits abroad.High demand and profit potential in Chinas housing market make the industry a key investment target for foreign financial institutions, who will offer real estate developers financial services ranging from feasibility studies to consulting, the article said. Most investment would go to the residential housing market, and increasingly in Chinas medium-sized and smaller cities, the article said. Chinas idle office construction industry will be a direct beneficiary of the mushrooming of foreign-invested factories and branch offices likely to follow in the wake of Chinas WTO entry, the article said. Chinas domestic building materials industry, however, which has few key products and minimal exposure to international markets, will be negatively impacted by Chinas entry to WTO. But domestic developers would benefit from the downward pressure on building materials, and Chinas accession would lower import tariffs. Cheaper materials will bring building costs down, so housing costs should fall as well. In the medium to long term, the institutionalized reforms required by WTO rules are likely to have a positive impact for real estate investors and occupiers as a result of increased business activity and the more systematic development of Chinas economy as a whole. The commercial and residential markets are overbuilt because too many developers rushed into China at the same time, and the strong demand was just not enough to fill the space. WTO will be a boost on the demand side, and may just fulfill some of the hopes that investors had when they came to China. Like the commercial market, the expatriate housing market will be positively affected. While certain companies have been reducing expatriates in the last several years (or at least the proportion of expatriates to overall employees), the wave of new companies coming to China will likely bring more senior expatriate managers, however according to the AmCham 2000 Housing Survey, foreign companies plan not to hire as many expatriates in the upcoming year. WTO will have a positive effect on the market and there will be more expatriates entering China from smaller or medium sized businesses. Its not all hype. Some economists believe that WTO membership is being over publicized, but others see it as the answer to Beijings real estate problems. It is generally believed that Chinas pending entry into the World Trade Organization will be a blessing for Beijings real estate market, which has been depressed since the economic boom of the mid-1990s. As China began competing on the global market, it became clear that meeting international standards for quality and comfort were crucial. The message was clear: You may choose to cut corners, but your competitors may not. The capitals commercial real estate market has been on a dizzying roller-coaster ride for the past decade. At its peak, roughly around 1994, Beijings rental market was on par with the worlds major financial centers. But just six years later, prices have plummeted and there is debate over whether the bottom has been reached. Although Beijing seems like it is under permanent reconstruction, it is only comparatively recently that the incessant cacophony of banging and drilling took over the capital. A major government policy change in 1992 provided overseas investors with preferential incentives to invest in Beijing commercial real estate, which quickly resulted in the capital becoming one of the worlds most expensive rental markets. Previously, foreign companies and foreign residents were extremely restricted by the number of hotels, housing and office complexes available to them. However, by late 1994, a surge of new buildings began cropping up across the city and Beijings real estate market peaked. Early 1995 offices occupied 100 percent and office space was at a premium. Office complexes were charging over US$140 per square meter per month. However, the boom didnt last. After the initial frenzy, rental prices started to slip before plummeting by as much as 30 percent a year. But investors began to tire of Chinas meager return on investment. The decline was triggered by a slew of factors, not the least of which was the Asian financial crisis of 1997-99 and the reluctance of foreign multinationals to continue pumping money into a saturated market. Oversupply remains a problem, with an estimated 20 percent to 30 percent of commercial real estate remaining vacant. But how long before demand equals supply is subject to debate. While some market analysts believe 1999 was one of the most active years in recent memory, others insist that the market is still sluggish. However, overall the advent of WTO membership has brought about a general feeling of optimism. As a result, rental fees are once again expected to rise and vacancies decrease. The commercial sector has turned around very quickly and rents are going up. The 37-story China World Tower II, which opened last October, only has three floors available for rent. The building began with 58,000 square meters of empty space. For domestic companies in real estate, a large and steady inflow of foreign investment will be crucial to reforming state-owned enterprises. Reform is invariably going to lead to the closure of many inefficient enterprises. But the good news is that increasing demand is coming from local private businesses. More and more domestic companies are moving into Grade-A office buildings, which previously had only been occupied by foreign companies. In the second half of last year, 60 percent of the demand for rental space came from Chinese companies. This development was fueled not only by declining rental fees, but also by a push among Chinese companies to upgrade their image. In addition to shifts in rental costs, the quality of projects in Beijing has improved considerably over the last several years. Increased competition has made developers realize that there is a demand for quality. Therefore, in addition to modern facades and grandiose, marble-laden lobbies, a significant number of technical improvements have also been made. Higher ceilings, faster elevators, year-round air conditioning, and ample daily and back-up electrical power are just some of the improvements included in newer buildings and renovations. Multinational companies in Beijing can finally see that the office market has matured, maybe not fully, but at least to the point where there is some value for money. So the market is ready for the demand expected from the influx of expatriates resulting from the WTO. Its all a matter of time when the agreement is signed. The signing of the bilateral trade agreement between China and the United States on November 15, 1999 opened the way for Chinas accession to the World Trade Organization in the near future. Chinas real estate market will greatly benefit once China gains entry into the WTO for the following reasons: 1. Low tariffs help to lower construction costs and hence housing prices.Since 1992, import tariffs in China have been lowered five times from an average level of forty-three percent to the present level of seventeen percent. Tariff rates will be further reduced and certain import restrictions will be removed with Chinas entry into the WTO. At the moment, most medium to high-end building materials and construction machinery, for example, lumber, interior decoration materials, sanitary ware, insulation materials, elevators and electrical products are imported. Lowering of the tariffs will lower the prices of these products and as a result, the construction cost of buildings will be reduced. Also, more imports of these types of products will improve the quality of houses. 2. Residents and non-residents are usually granted different terms for home purchases in most cities in China. It is common that non-residents pay a higher land premium and management fees.With the accession, this kind of restriction is likely to be eliminated. Most non-residents are concerned about the investment value of the homes they purchase. During the past twelve years, home prices have increased almost four times. Many foreigners are aware of this fact, and are attracted to this opportunity, particularly in coastal areas and/or large cities. There is still a lot of room for expansion of the residential market. Therefore, the removal of unequal terms for residents and non-residents will help boost the real estate market. 3. By opening up the services sector the vacancy rates in the commercial real estate market will be brought down. China has to open up its services sector with accession to WTO. Foreign companies in the banking, insurance, retail, telecommunications, legal, entertainment and travel sectors, which are refused entry, will be allowed into the China market. All these types of businesses prefer office locations in the cities, often in central business districts. At present, high vacancy rates in the commercial real estate market is a problem in China. The vacant units, readily available at good prices due to oversupply, will help foreign firms to make quick in-roads into China. As a result, opening up services sector will help to improve the office and commercial real estate market.Opening the market to foreign financial companies will help improve the home mortgage market there is a co-relationship between the real estate market and the financial market. At present, the financial market in China has a long way to develop. Entry of foreign financial companies and insurance companies into the China market as a result of Chinas accession will help to stimulate the financial market, and in turn the home mortgage and real estate market. 4. Automobiles, facilitating mobility of people, will help to improve the real estate market, particularly in the suburban areas. At present, import tariffs for automobiles are 100-150 percent, which are among the highest in the world. Protectionism has resulted not only in a lack of competition in the local automobile industry, it also makes production costs and the sales price of the automobiles high. After entering the WTO, China is going to reduce import tariffs by 10 percent every year for six years. As a result, prices of automobiles will go down making automobiles more affordable. With mobility, home purchasers will be more willing to buy homes in the suburban areas, where homes are cheaper. 5. Expansion of foreign access to the agricultural market will result in more farmers re