In China's Development Of Real Estate Investment Trusts

Real Estate is one of national essential industries. It plays animportant role in the development and promotion of national economy.However, Chinese financial market for real estate is not mature enoughto support it's healthy and long-term development. In fact, bank loanturns to be the exclusive channel to finance real estate projects, whichleads to a dangerous situation that the risk of real estate may transferto commercial banks. Therefore, we explore various solutions to theproblem.According to the successful experience of United States, Real EstateInvestment Trusts (REITs) is a good choice. In America, REITs shows asatisfying performance. The rate of return of American REITs is evenhigher than the return on investment of fixed-return security, such asnational security. Well, in China, various financing measures, such asbank loan, IPO and real estate trusts show different drawbacks. Incontrast, necessary conditions for the development of REITs in China havebeen satisfied. So, we need to take advantage of favorable environmentto develop REITs and promote Chinese real estate market. The article belowintroduces the basic academic information of REITs, analyzes the currentsituation of Chinese real estate financial market, then explores thepossibilities and significance of REITs in China, and finally providessome constructive suggestion.