Nine years ago, in July 2006, six different Chinese government agencies issued Opinion 171, the first of a number of circulars imposing limits on foreign investment in the property market in response to concerns about a rapidly overheating market. On August 19, 2015, reflecting concerns about a slowing economy, these same six agencies - the Ministry of Housing and Urban-Rural Development (“MOHURD”), the Ministry of Commerce (“MOFCOM”), 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 (“SAFE”) – issued the Circular on Adjusting Policies on Real Estate Market Access by Foreign Investors and Related Administration (“Circular 122”) lifting a number of these limits with a view to boosting a sluggish market. Circular 122 took immediate effect.

Circular 122 is not the first measure adopted by the Chinese authorities to boost the property market. Over the past 12 months, the Chinese government has taken various such measures. However, these measures targeted and principally benefited domestic investors. Circular 122 is the first measure targeting foreign investors.