China Alters Foreign Investment Rules

China is tightening its grip once more on foreign investors in Chinese real estate, banning them from borrowing offshore in the latest effort to tame property prices and cool the economy.

The new rule, set out in a circular from the State Administration of Foreign Exchange , could squeeze foreign investors who take advantage of lower interest rates outside China.

Some may find it especially difficult to fund projects as Beijing has told its banks to cut back on loans for the construction industry. The central bank ordered Chinese banks to stop lending for land purchases as far back as 2003.

"The only alternative is to fund the entire equity," said Andrew McGinty, a partner at the law firm Lovells in Shanghai.

More at China Daily.

(Via a long and interesting post at

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