In January 2007, Warburg Pincus LLC from the United States increased its investment in the Shanghai-based ZK Group in the form of expansion of capital and stocks.

Several real-estate investment funds or real estate projects that Deutsche Bank will bring to market in the first half of 2007 are in China's mainland, said Dan Chen, Chief Representative in Beijing of Deutsche Bank, early this year.

The residential land in Chinese cities will be favored by foreign capital, and more attention will be paid to small and medium-sized cities, said Francis Li Chi-wing, Vice Chairman and Head of Investment of North Asia of DTZ, in an interview with China Business News.

"Whole buildings will be the first choice for foreign capital that wants to reduce risks in development. Many reconstruction projects in cities and construction plans to move their central business districts in the future will increase the land supply to the market. Acceleration of the urbanization process will also further promote the housing demand," added Li.

The government work report delivered by Premier Wen Jiabao at the Fifth Session of the 10th National People's Congress also highlighted the importance of maintaining an adequate scale of fixed asset investment and optimizing the investment structure. The soaring housing price will be a main problem to be dealt with so as to push forward the sound development of real estate and construction industries.

However, policies of the Central Government to strengthen housing supply have not come out yet apart from a few specific regulations. It has yet to be determined whether the new macro control policy will relieve restrictions on foreign capital.

Three Macro Controls Over China's Real Estate Market - The first macro control: to cool overheated real estate investment June 2003: The People's Bank of China issued the Notice on Further Strengthening Credit and Loan Business Management of Real Estate (No.121 Document) on June 5 to bring the investment craze of real estate under control. July 2003: The State Council issued a tight control over land supply. March 2004: The Ministry of Land and Resources and the Ministry of Supervision issued a joint order to strengthen efforts to regulate the real estate industry. April 2004: The State Council issued a notice to raise the capital ratio of fixed asset investment projects of four major industries including real estate, with that for real estate development (excluding economical housing) increasing from 20 percent to above 35 percent. - The second macro control: to restrain surging housing prices March 2005: The People's Bank of China released a policy that cancelled the favorable interest rates of housing loans and showed its determination to tighten macro control over the real estate industry. March 2005: The State Council issued the Notice on Stabilizing the Housing Price made up of eight points. - The third macro control: to improve the structure of housing supply May 2006: Premier Wen Jiabao of the State Council presided over a standing meeting of the State Council, where six measures of promoting the sound development of the real estate industry were put forward. July 2006: The Ministry of Construction, the Ministry of Commerce, the National Development and Reform Commission, the People's Bank of China, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange jointly released the Opinions on Regulating Access and Management of Foreign Investment in Real Estate (No.171 Document), aimed at restricting foreign capital from purchasing properties or entering into China's real estate industry.