Would you invest in China?

[JoeFat]

There's a company down here selling investment properties (well, leases) in China.

(nzinvest.co.nz/default2.aspx#ChinaHeading)

I prefer to invest locally and would be very cautious about investing in a different country - let alone

a country with a different culture, language, and even alphabet.

What do you think?

[The_Dog]

I understand that China is pretty closed to foreign investment, and there are very tight rules. I can't remember the detail, but I think any company wanting to operate in China needed a fair portion of the business to be owned and directed by Chinese interests. I think it was in relation to Coke or Mc Donald’s trying to break into the market, and they really struggled.

The opportunities there are massive. HUGE. But I think there are rules about getting money out of the country as well. Government control is restrictive.

It would warrant a LOT of investigation before taking the plunge.

The Dog

[jadelotus]

the chinese economy is hugh, so making a direct property investment in there is fraught with uncertainty. looking for the great deal is like looking for the proverbial needle in the haystack.
but there is money to be made in china.
why not look at the stock market and find companies that are already involved in property development there and buy their stocks.
this also means that you achieve diversification.
as an example Keppel Land is a company listed on the Singapore stock exchange - they are involved in several developments in china and other parts of S.E Asia and just recently announced a new project in singapore - very flash, architect is now other than Libeskind (sic) who designed the monument at ground zero in NY.
Last year, they bought 60% of a company call Dragon Land now renamed to Evergro which is purely into chinese development.
the share price of Evergro has gone from US 7cents to US23cents pre and post Keppel's partial take-over. not bad return within a year.

[Chinese connection]

Investing in China is much easier than you would expect, and the potential, far from being a needle in the haystack, is absolutely everywhere. New government regulations actually encourage foreign investment and make the process a whole lot easier than you would imagine.

There has already been collosal gains in the flag ship cities of Beijing and Shanghai- to such an extent that the government introduced cooling down measures. These measures have bought gains down to around 10% annually. These generally encourage investors to hold onto to their land for a five year period to avoid taxes.

The savy investor is now looking to so called "tier 2" cities (in essence these are the capital cities of provinces) such as Wuhan, Xi'an, Chongqing and Chengdu. Right now we are seeing 30% increases on real estate over 6 months while the government invests massively in infrastructure to address the imbalance of income disparity. Prime properties can be picked up for around $NZ100k in cities all over inland China, and the risk is not substantial as I see it. The ability to choose great, central locations in cities with 8 million people and more (serious purchasing power) is excellent news for kiwi investors

In fact I have been in China for 3 and a half years and have already bought two brand new properties in sweet locations which receive a yield of around 8% annually and are increasing on a daily basis. Indeed I am even selling my little patch on Great barrier Island (at around a 600% profit) which should net me another 3 properties in China.

The key, as ever is to do your homework and/or have someone on the ground in China who knows what they are doing. In that regard I can highly recommend Sino-NZ Investment Group who specialize in the field
invest-in-china.moonfruit.com

They have specialist Chinese realtors at their disposal and only deal with legitimate licensed developers. Investing in China does require a little patience and imagination, however for the brave, sharp increases can be relatively safely anticipated.

There is also the issue of the Renminbi (Chinese currency) which has finally unpegged from the US$, and while still heavily regulated is making slow gains with the potential to lift sharply in the face of US pressure.

If you have any questions about China real estate I am happy to help. Drop me an email