The following is a book review written by Russell Murphy, a very experienced China lawyer who speaks both speaks and reads Mandarin.
The review is of Modern Chinese Real Estate Law (Property Development in an Evolving Legal System) by Gregory M. Stein, Professor of Law at the University of Tennessee College of Law. I asked Russell to read and review this book because of Russell’s experience with international real estate.
Here is the review:
China real estate is estimated to contribute approximately USD $1 trillion (15%) to China’s economy in 2013. Professor Gregory M. Stein’s Modern Chinese Real Estate Law (Property Development in a Developing Economy) is an excellent introduction to the inner workings of a that important sector.
Professor Stein interviewed lawyers, property developers, and government officials to put together an insightful exposition on the inner workings of the Chinese real property development industry. Professor Stein does not attribute any of his conversations to his sources, having extended the anonymity requested by a few of his interviewees to all who participated. However, the resulting freedom from fear of consequences to participants allows the book to explore in detail potentially provocative subjects, such as how the government comes to possess all of the land underlying the development in the first place.
The book is divided into three parts. Part I of the describes the challenges of legal work in a field such as real property development where the laws and regulations have been non-existent, under consideration, or only recently adopted. The mismatch of demands for taking rapid action in property development and the ambiguities in China’s legal framework produce a tension that rewards the innovative (and brave) and provides guidance to both imitators and the regulators seeking to keep up.
Part II transitions smoothly into the details of how real property gets developed and sold in China. All but one chapter in this part focuses on residential property, and given the importance of the housing market to Chinese development, and the individual Chinese person’s plans for wealth creation, it is a good place to spend the bulk of the research. It is, however, somewhat unfortunate that only one chapter deals with development of infrastructure, because the public works arena is another major part of China’s development story. However, infrastructure and public works can easily be the subject of a separate book, and by maintaining its focus on residential and commercial, the book delivers a much more valuable proposition for the reader.
Part III is a departure from the practical aspects of Parts I and II as it delves into the theories of the relationship between development economics and development of the rule of law. After an overview of theories generally and then application to China’s recent economic history, Stein adds his own explanation to try to reconcile some conflicts. Though interesting certainly to the academic reader, the real estate practitioner likely will not find these last two sections nearly as vital and practical as the bulk of the preceding text.
This is not the book to use as a source for texts of China’s real estate laws and regulations, though it does contain citations to legal references in the footnotes for those who want the specifics. The book reads easily, and despite the title, it does not really require a legal background to understand, and so should be of interest to anyone interested in the Chinese Real Estate market, or even in the Chinese economy in general. A lawyer or development professional will want to follow up with the reference materials cited for the details, but will still benefit from the comprehensive introduction to industry practices Professor Stein has provided. If you are interested in how China real estate works, I recommend you read this book.