In order to reflect the impact of global economic recession and the slowdown of Chinese economy, the State Council promulgated “The suggestions to stimulate concurrent Chinese financial development.”
One of the suggestions clearly stated “starts the experiment of REITs can be used to broaden real estate enterprises’ financing channels.”

At the turn of this century, the Chinese academia, financial community, real estate community already started research on REITs. The following are the actions which the Chinese government took to promote REITs.

At the end of 2004, the China Banking Regulatory Commission initiated the research of basic institutional infrastructure of REITs.

At September of 2005, on the report of nationwide commercial real estate survey drafted by the Chinese Ministry of Commerce to the Chinese State Council, it stated the suggestion of using REITs to financing.

At June of 2007, The People’s Bank of China hosted symposia on REITs. During this Symposia, the National Development and Reform Commission, the Ministry of Finance, former Ministry of construction, former Ministry of Labor, the Banking Regulatory Commission, the Securities Regulatory Commission, and the insurance regulatory commission all show its interest and support of REITs. They advise that the Chinese REITs should follow the principle that the regulation and experiment of REITS should proceed parallelly.

At the same year, CITICS SECURITIES and UNION TRUST were chosen as the pilot work units of REITs. The People’s Bank also drafted the request of REITs experiment.
At April of 2007, the Securities Regulatory Commission formed a new research group focused mainly on REITs.

At the end of 2007, a research team was established by the Banking Regulatory Commission which consists of experts from various securities companies, ZhongLun W&D Law Firm, and top Chinese universities.

At August of 2008, the People’s Bank requested the Chinese State Council to commence the preparation of experiment of REITs.

At December of 2008, the city of TianJin reported its preparation of experimental REITs to the Chinese State Council.

At December the third of 2008, the Chinese State Council pointed out at one of its meeting that it will encourage enterprises to use REITs and other means to broaden its financing channels.
At December the thirteen of 2008, the Chinese State Council promulgated “The opinions on concurrent issues of using finance to stimulate economy.”

Since 2005, as a professional legal institution, ZHONGLUN W&D LAW FIRM played a very important role in the process of promoting REITs in China. We are now providing legal service to the first Chinese REITs which will be listed at ShangHai Stock exchange.

Author:
Cao Yadong, Partner of Zhonglun W & D
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