China Law Insight : China Law Insight: China Commercial and Intellectual Property Lawyers and Attorneys, Full Service Law Firm: King & Wood

The new version of the Insurance Law that came into force October 2009 made it clear that insurance companies would have more investment channels are open for insurance funds, specifically, the 2009 Insurance Law stated that investing insurance funds in real estate was acceptable. In September 2010, the CIRC promulgated the Provisional Measures for Insurance Capital Investment in Real Estate. This regulation provides the basic outline of what the types of real estate projects that insurance companies can invest in. Although this regulation is in place, it appears that the CIRC is not ready to approve insurance companies investing real estate projects, but announcement can probably be taken as evidence that CIRC is moving closer to being ready to approve insurance companies investing in real estate projects. Also based on Chairman Wu's statements it probably can be assumed that the first real estate project that insurance company investing will be located in Shanghai, and it most likely be a housing project that is subsidized to keep its prices affordable.

If you have any questions about the potential for insurance funds to be invested in real estate development projects, or if you would like more details on the Provisional Measure for Insurance Capital Investment in Real Estate please contact us.

The information contained in this post is available at: http://www.chinadaily.com.cn/usa/business/2011-03/07/content_12130923.htm

The Urban and Rural Planning Law of the People's Republic of China became effective on January 1, 2008 and replaced the City Planning Law. Previously, urban and rural plans were governed by different laws. The City Planning Law governed urban areas and the Administrative Regulations on the Country and Township Construction Plans governed rural areas. The new law now begins an era of integrated urban and rural planning.

Highlights of the Urban and Rural Planning Law

1. Emphasizing Procedural Requirements such as Notice & Comment Period

2. Tightening Environmental Protection, Natural and Cultural Heritage Protection

3. Strengthening Rural Planning

4. Public Participation and Increasing Supervision and Inspection

5. Providing Relevant Legal Liabilities Punishing Local Governments for Non-compliance.

A Few Hot Issues:

-The Urban and Rural Planning Law stipulates more stringent approval procedures for building premises required by township and village enterprises, rural common facilities or public interest establishments within a township or village planning area. The Urban and Rural Planning Law provides that no farm land can be used for such buildings unless approved by the corresponding department of urban and rural planning under the people's government of the city or county.

-Chapter III of Implementation of Urban and Rural Planning, provides more complicated construction land-use right approval procedures than that provided in the Land Administration Law and former City Planning Law. Procedures for changing land use purpose are more stringent to curb disorganized allocation, transfer and use of construction land.

-The right to legally recover State-owned land is addressed in Article 58 of the Land Administration Law, which provides that "proper compensation should be given to land use right owners", but the Urban and Rural Planning Law, in line with the legislative spirit of the Property Rights Law , provides that "compensations shall be made according to law". This provision denotes an inclination towards property right holders.

It will be interesting to see how the law is enforced. This could be a great tool for smart growth within China.