CHINA Law and Practice Contributed by: Nancy Zhang, Xiaoying Tian, Qian Gu and Liangqian Ying, JunHe
1. General 1.1 Main Sources of Law The laws promulgated at the national level include: • the Civil Code; • the Land Administration Law; • the Urban and Rural Planning Law; • the Construction Law; and • the Urban Real Estate Administration Law. 1.2 Main Market Trends and Deals During 2023, office space remained the most sought-after asset class in terms of transac - tion value in the real estate market of the PRC, representing 45% of the total transaction value, retail properties accounted for 10%, represent - ing a substantial increase of approximately 7% compared to the previous year, apartment buildings and hotels accounted for 15%, with a notable increase of about 5% (Source: Colliers International Group Inc, Review and Analysis of the Bulk Trading Markets in Major Chinese Cit - ies in 2023, 2 February 2024). The majority of transactions continue to be driven by domestic demand, accounting for a staggering 89% of all transactions. Notable transactions in 2023 include Bain’s acquisition of Chindata for RMB22.8 billion. Chindata Group Holdings Ltd (Nasdaq: CD) stands as a leading Chinese hyperscale data centre solution provider with more than 33 hyperscale data centres worldwide. Addition - ally, Swire Properties acquired the equity inter - ests in two project companies of Lujiazui Group, each of whom owns a piece of mixed-use land in Yangjing and New Bund respectively, at a total price of RMB9,709.97 million.
China sustained a remarkably low inflation rate in 2023 and continued implementing interest rate cuts throughout the year. However, the real estate industry did not experience a posi - tive bounce back in 2023 (source: China Lian - he Credit Rating Co., Ltd, Review of the Real Estate Industry in 2023 and Prospect for 2024, 27 December 2023). 1.3 Proposals for Reform The PRC Company Law (as amended and repub - lished on 29 December 2023), effective on 1 July 2024, has made material amendments in respect of company registration, corporate governance, equity capital, shareholders’ rights, employees’ rights, and special rules governing state-capital companies and public companies. 2. Sale and Purchase 2.1 Categories of Property Rights There are two main categories of property rights under PRC laws. • Ownership right is the right to possess, use, receive proceeds from and dispose of the properties of the owner. Under PRC law, land may only be owned by the state or collec - tively owned by farmers. • Usufructuary right is the right to possess, use and receive proceeds from the proper - ties owned by other persons, such as land use rights, contracting rights for farmland, farmer’s rights to homestead land, rights of habitation and easement rights. 2.2 Laws Applicable to Transfer of Title National laws and regulations mainly include: • the Civil Code; • Urban Real Estate Administration Law;
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