Chinese businesses thrive despite government regulations

Even though Chinese regulation has put a clamp on excessive growth within the Chinese real estate market, business has continued to grow.

Two concerns of the Chinese government going into the start of this year were the increasing number of foreign investments into the Chinese real estate market and the fact that a real estate bubble might be forming.

In order to curtail both of those perceived threats, the Chinese government went ahead and introduced legislation that would make it more difficult for foreigners to invest in the principle real estate boom areas of the Chinese market.

While that may have prevented additional foreign investment into the larger Chinese cities, many of the different property development firms and foreign investors started looking at other cities for their property acquisition. When this happened, it was clear that business would continue to boom inspite of China's introduced legislation.

A good example of this is the fact that western hotels have begun establishing franchises within China. The InterContinental, the Holiday Inn and the Crowne Plaza all have franchises going up in the Chinese city of Chengdu, courtesy of Chinese property tycoon Deng Hong.

This is only the beginning, however, as the China National Tourism Administration expects around 10,000 hotels rated at least one star or above likely to be built in China over the next seven years. Each of those hotels represent a property investment, development and sell-off that will be occurring in the Chinese real estate market and many of those projects will be financed by foreign money into second and third tier Chinese cities.

At a time when such investments are on the rise, so too are joint ventures. Gemdale Corporation, a China-based property development firm, has already agreed to set up partnership with New York company UBS in order to build properties in China. It is quite clear that business in the country is still booming inspite of regulatory measures undertaken by the Chinese government.