Those who follow China closely know that there is a bubble (or at least a large spike in value) affecting residential and other Chinese real estate, especially in coastal areas. As large savings accumulate among China's wealthiest sector, much is flowing into hard assets rather than being kept in cash or securities. A boom continues in housing units. Just as Florida has seen dramatic boom and bust cycles over many decades, so China is experiencing a growth in housing units fueled by speculation and forces that view housing as an investment more than a place to live. The Chinese Government is well aware of this, of course, and recently took measures to dampen speculation. The nature of the Chinese economy and government allows more forceful and direct regulation of such matters than is common in the United States.

For US companies and investors, the measures signal a clear direction that it will become more difficult for a non-Chinese person to purchase housing units in China. For a company wishing to buy an apartment for its expats working in China, for example, creative efforts will be needed to get around measures that create obstacles to acquiring housing units or to participate in housing development. One can expect the Government's efforts to encompass commercial real estate as well. For an excellent summary of recent announced steps in this area, see http://www.junhe.com/marketing/201005/Realestate-20100506.pdf