Solely foreign-funded companies will continue to be banned from the
real estate management business in China, it was revealed
yesterday.
China did not promise to open the market in its commitment to the
World Trade Organization (WTO),
said an official with the China Real Estate Management
Association.
"We have to be very careful, because the business is related to the
improvement of people's living standards and the stability of
social order," said the official, who declined to be named.
A
number of foreign companies have applied to enter the business
after China's membership to the WTO was accepted, he said.
Relevant government departments are considering whether to allow
solely foreign-funded companies to do business in coming years, he
added.
Yao Li, managing director of Yinda Property, said China should open
the business to solely foreign-funded companies, because these
companies would help improve the overall quality of China's
real-estate management industry.
"A
more open market will also require the government to provide
improved regulations," she said.
China's real-estate management business started in 1983, when the
first agency was established in South China's Shenzhen Special
Economic Zone.
Now the country has more than 20,000 real-estate management
companies, including Sino-foreign-funded ones.
"Real-estate management has become known among common people,
because many developers and owners began to employ reputable
companies to provide professional and quality services for their
properties," said Mo Tianquan, secretary-general of the China Real
Estate Index System.
"Quality management has become a necessity when marketing a
property," Mo said.
All major Chinese cities such as Shanghai, Beijing and Guangzhou
have established a modus operandi for property management.
However, problems still exist in the current property management
industry, experts said.
According to the Property Management Regulations for Residential
Districts, management fees cannot be treated as the income of the
management company. The maximum amount of remuneration is limited
to 15 percent of revenue from management fees.
But according to the government's taxation regulations, the income
from management fees is regarded as the income of the company and a
sales tax of approximately 15 percent will be levied.
Management companies have the authority to control the operating
expenditure and use of such fees.
The disparity between the two regulations has generated conflicts
between the owners-occupiers and management companies.
The government should try to upgrade current standards with
reference to international practice.
(China
Daily March 5, 2002)