Jeff LoCastro, January 9, 2012
Founder & President, NCCREA
China is a country of laws. Lots and lots and lots of laws. But having laws
does not equate to the 'rule of law.' That is still evolving and is at best a
work in progress. They have so many laws for virtually everything
conceivable that it is impossible for the layman to navigate. The
purpose of so many laws is to be able to control certain aspects of the
society, culture, and marketplace if whenever and wherever the
government decides it needs control. Doing business in China, done
properly, can be a financial bonanza but can also be horrendously
difficult to gain traction and to get started. Much of everything here is
purposefully hidden from plain view, and sometimes even the most base
actions can seem interminable. However, if Johnny Law (Government) is
saying "no" to your operation, perhaps it's because you have not
found the way to get them to say "yes." And in China there is lots of
For example, in 2004, citing water conservation considerations the
Beijing Municipality outlawed the construction and development
of golf courses in the city. At the time of the ban, Beijing boasted
approximately 38 courses. As of this writing some reports suggest a
current inventory of 60 courses, some suggest 73, while still others
put the number at 170 (including driving ranges). Why the crazy
wide range . . . 60 to 170? Doesn't anyone actually know? How could
they not know? Well, welcome to China.
Regardless, the fact is clear that somewhere between 60 and 170 courses
have been built since 2004 when golf courses where banned. There are
two main factors at play here: the Articulated Reason and the Real
Reason. 1) Yes, their construction was banned for the articulated
reason of water conservation. They could play the "Conservationist"
card to the world community. 2) However, the real reason was that
it created another channel to a vast wealth of underground cash flow.
But so many outsiders continually report such things from a foundation
of naiveté and ignorance. According to a 2009 article from The
Guardian, "China imposed a moratorium on course building in 2004,
but the game's popularity has led developers to continue construction
without permission. While the first course opened on the mainland
only in 1984, there are now believed to be around 500 and on one
estimate the total could rise to 2,700 by 2015."
Without permission? The developers have slipped not one but
potentially hundreds of courses past the noses of Chinese officials?
Really? In the "Land of Permission" some developers risked 25 years of
hard labor to build a golf course . . . without permission? Some
developers where able to demolish, construct, green and water hundreds
and hundreds of acres of land in one of the most densely populated
cities in the world . . . and no one noticed? Frankly, I'm not sure
whether to feel pity for the The Guardian author or disgust.
Of course they noticed! (no pun intended). The developers simply found
a way to get them to say "yes." Many have bypassed the law by calling
them a "wildlife refuge" or "aquatic park." That's fine for your initial
set of drawings, but what do you when the contingent of inspectors
comes-a-callin'? And they will come-a-callin' . . . in busloads. The
fact is it all semantics. And everyone knows it.
To be clear: this is not the case of scores of greedy robber baron
developers thwarting regulation and fooling an unwitting governance
in order to build 18-holes and a club house. It was the way, with a
wink and a nod from Johnny-Law, the ban was circumvented. To those
living and making deals in China, there is no secret surrounding their
solution or the fact that many 'approval cogs' are now members of
these wildlife refuges.
There is your flexibility: Just because you can't, doesn't mean they
won't. But you enter such arrangements at your own peril. Because
whatever Johnny Law giveth, Johnny Law can taketh away.
COPYRIGHT 2012 JEFF LOCASTRO
DISTRIBUTED BY NCCREA
CHANGZHI, SHANXI, PRC
Contact the author at: Jeff@NCCREA.com or Jeff@CaliforniaSecured.com
Copyright 2011 North Central China Real Estate Association. All rights reserved. All content, web site design, text, graphics, the selection and arrangement thereof are Copyright 2010-2011 by North Central China Real Estate Association. Any use of this website, including reproduction, modification, distribution or republication in any form, without the prior written consent of North Central China Real Estate Association is strictly prohibited.