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.

China’s real estate has rapidly grown in popularity with international property investors who seek maximum diversification within their portfolios because the real estate market in China is in demand locally and internationally and demand spans both the commercial and residential real estate sectors.

This means that there is maximum room for profits, income and gains from Chinese real estate which makes it an intensely attractive commodity for investors.

The Chinese government are also keen to attract foreign investment into their country and began easing many restrictions to smooth the path for those interested in purchasing property in China back in 1998. Their efforts to boost their economy through the promotion of foreign direct investment proved almost too successful and resulted in the government fearing that speculators would strip the property market of stability. As a result the Chinese government have now made it more difficult for investors to realise short term gains from the property market. Because of this fact the market is now less popular with those real estate investors looking for short term gains and more popular with those looking for a stable market with massive potential for demand and expansion over the medium to long term.

In terms of foreigner’s rights when it comes to owning real estate in China, all overseas buyers are protected by Chinese law but actual real estate law and the property buying process in China are new concepts that are relatively immature and unsophisticated. This means that investors who wish to buy property directly in China need to secure the services of a reputable lawyer to assist with the intricacies of the real estate purchase process.

For those who wish to maximise the potential gains available in Chinese property but who wish to remain relatively hands off any investment made, there are a series of property investment funds specialising in Chinese real estate now available. Such funds issued by larger, well established financial institutions are proving increasingly popular with both local and international investors. Such real estate investment funds allow an investor to gain access to the potential of the property market in China without having to commit significant sums of money directly to the market. Furthermore, by investing in this way an investor’s underlying money is far easier to access than if it were used to directly purchase real estate in China.