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The National Bureau of Statistics defines real estate as investment goods, therefore, China restricts foreign investment in its real estate market, as do many other countries.
An article in the Global Times says the risks of harm that come with foreign investment in the real estate market, however, will be massive. The measure will do more harm than good.(www.hXen.com)
It says real estate has attracted capital from all domestic industries, which twists its structure and development pattern. Foreign investment won't change the twists but on the contrary worsen them. This will obstruct the transformation of China's economic development pattern advocated by the government.
It further notes that real estate prices are determined by market expectancy. If the government adopts policies that encourage more investment in real estate, prices will be driven up. This goes against the government's earlier stated aim to lower real estate prices to encourage more people to buy their own property. It could also lead to bubbles in the industry, posing a potential threat to China's economy.
In conclusion, the paper says the government should make real estate information transparent so people can know what is happening. Only when real estate prices fall back to reasonable levels and people can afford it, can the market recover.