All the Tea in China

October 1, 2000

China has room to grow--lots of land, lots of places to build new homes, and lots of potential homeowners.

That means great opportunities are opening for REALTORS®. In fact, during my visit to China this past summer, I was surprised to find so many of our members already there doing business, acting as property management consultants and advising on the development and marketing of residential and commercial properties. To me, that was wonderful, and just the beginning.

It was impressive to see what strides China is making in business and in homeownership. A new high-tech industry is infusing many urban environments with newfound cash; for example, there are several streets in Beijing that compare favorably with Chicago’s “Magnificent Mile” on Michigan Avenue. At the same time, the flood of new dot-coms in the urban areas is spawning a yuppie class with the wealth, and the desire, to own their own home.

On another front, China is ending the decades-old system of government-owned housing for workers. That’s opening up homeownership to the working class for the first time, but with mixed results. Many workers don’t understand the value of homeownership; and since rents are still low, they prefer renting to owning.

What is sorely lacking, not only in China, is a secondary mortgage market. The United States is the envy of the world, with Fannie Mae and Freddie Mac pumping billions of dollars back into the lending industry. Fannie and Freddie fuel the home purchasing process by buying up mortgages, packaging them into securities, and selling the securities to investors. That frees up lenders to lend again and makes our housing industry strong, and, at the same time, it helps to keep interest rates low. There’s no equivalent in China, or, for that matter, anywhere else in the world.

During 2000, NAR increased the number of cooperative agreements with our organization partners to 46 in 37 foreign countries. I am pleased that the list now includes China, Germany, Hong Kong, and France.

The long-term benefit to REALTORS® from an orderly real estate market, whether it’s in Russia or China or elsewhere, is new business opportunities and a return on investment capital. As China emerges onto the world stage and opens up its housing industry to free enterprise, it will bring great things to real estate. I see our work there now as an investment in our future.

Dennis R. Cronk was 2000 president of the NATIONAL ASSOCIATION OF REALTORS®.

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