China’s capital control and its impacts on overseas real estate investment

Abstract

It has been more than 20 years since China introduced capital controls in the 1990s. During this period, China experienced two world-class financial crises: the 1998 Asian financial crisis and the 2008 US subprime mortgage crisis. In fact, since China joined the World Trade Organisation in 2001, it has opened up to the outside world and the economy has taken off. Capital controls and openness to other countries seem to be a set of contradictory words. In fact, since China joined the World Trade Organisation, it has heavily relied on foreign direct investment especially in eastern China and allowing local enterprises to invest overseas. The frequent and large-scale investment of tycoons in the real estate market overseas is good proof. This period became the “golden period” of these real estate tycoons. China’s housing prices rose, and investment in overseas real estate projects continued to mean a relaxation of capital controls. However, all of this was stopped in 2014 after Xi Jinping took office as the Chinese president. Many overseas real estate companies have been suspended from overseas investments, and some companies have even listed the main concerns of the China Foreign Exchange Administration. In this paper, the author uses the qualitative methods, to discuss the real estate market for overseas investment. Also, the purpose and effect of China’s implementation of capital control are discussed in detail, and the overseas investment of Chinese real estate enterprises is taken as a starting point to discuss the impact of this policy on overseas real estate investment after strengthening capital control. At a deeper level, the article discusses the reasons for opening and tightening capital controls in the macro sense in the last two chapters. National sovereign funds and China's “Belt and Road” have become the targets of macroeconomic research in these two chapters. Through the development of China's reform and opening up over the past 30 years, the authors have linked the exchange of foreign exchange reserves with capital controls and discussed the advantages and disadvantages of investing in overseas real estate markets for China over the past few decades.

從20世紀九十年代中國實行資本管制以來，已經過了有二十餘年。這期間，中國經歷了兩次世界級的金融危機，分別是1998年亞洲金融危機和2008年美國次貸危機，並且，中國從2001年加入世界貿易組織起，對外開放，經濟實現了騰飛。資本管制和對方開放，聽上去似乎是一組矛盾的詞。事實上，自中國加入世界貿易組織後，就對大力支持外商直接投資和支持本土企業進行海外投資，大型房地產企業在海外的頻繁和大量投資就是很好的體現。也就是這段時期，成為了這些房地產開發商們的“黃金時期”，中國房價上漲，海外房地產項目的投資不斷意味著資本管制的放寬。然而這一切在2014年自習近平上任為中國國家主席後戛然而止。許多大型房地產企業的海外投資被叫停，甚至有一些企業上了中國外匯管理局主要關注的名單。在本論文中，詳細的探討了中國實施資本管制的目的以及效果，並且通過詳細的案例討論由中國房地產企業的海外投資為出發點，探討了加強資本管制後，這一政策對海外房地產投資的影響。在更深層次上，本文在最後兩章中從宏觀角度討論了開放和加強資本管制的原因。在這兩章中，國家主權基金和中國的“一帶一路”已成為宏觀經濟研究的目標。通過30年來中國改革開放的發展，作者將外匯儲備的交換與資本管制聯繫起來，並討論了過去幾十年在中國投資海外房地產市場的利弊。