In 1979, the Mainland Chinese Government decided to loosen restrictions on foreign trade.
Special foreign trade policies were applied to Guangdong province & Fujian province. Special Economic Zones were established in selected cities. Remarkable achievements were accomplished in a short time, indicating the beginning of the irreversible integration of China into the world economy.
In the 21st Century, China has become a powerful economy in the world. Large amount of foreign funds pour into China’s various investment markets, including the property market. Properties have become a major component of commercial trades. In the early years, several preferential policies (including return of personal income tax, reduced transaction tax rate, relaxation of bank loan requirements) were applied by the Chinese Government, resulting in rapid escalation in property values. Since 2003, Chinese Government adopted Macro-Control policies to cool down the over-heated property market. However, property prices in 2007 indicate that such policies have not been effective. In some cases, property prices actually rise more rapidly when such policies applied.
This study is conducted in view of the above-mentioned situations. In Chapter 2, theories in financing and the situations in Mainland China were discussed. In Chapter 3, the Macro-Control policies from 2003 to 2006 were studied. In Chapter 4, legal implications of various financing mechanisms in Mainland China are analyzed. In Chapter 5, financing of Shanghai Expo was studied to analyze the financing methods adopted and how they are not effective. In Chapter 6, conclusions of real estate financing in Mainland China are presented.