One of the investment instruments is a Real Estate Investment Trust or REIT. Till very recently China was quite a closed economy. Investment in Chinese real estate possible was possible only through Hong Kong companies. GZI REIT operating from Hong Kong was the first successful REIT to have established control over REITs in mainland China. Now others have followed.
There is a great demand for real estate in China and will be strong during coming years, more so during 2008. Moreover, China is opening up and its economy is booming. Chi8nese middle class is also on swelling. All this bodes well for real estate in China.
Two major areas where REITs are going to be lucrative are hotels and resorts. So investors may do well investing in these REITs. According to Beijing Tourism Bureau, there will be 110 new hotels coming up for accommodating about 550,000 guests during Beijing Olympics.
Beijing and Shanghai REITs may provide opportunities for quick bucks. One can do good even in the long run.
One needs to be clear about investment objectives in China REITs. For short run profits, Beijing Olympics provides a good outlet for excellent returns. These may continue to be so even in the long run though at a reduced rate.
While investing in Chinese markets, one has to be careful about certain conditions which are peculiar to China only. For example it is still not considered a transparent country. Its laws are obscure and complex. There are many language and cultural barriers. In view of these problems, it might be advisable to invest in Hong Kong or Singapore REITs which have a stake in real estate of mainland China. These are more open and subject to international law.
International investing provides a mechanism for diversification and a hedge against US recession. Therefore, China and other Asian countries need to be given serious attention.
All of these markets need to be researched and explored.