China: next big thing.

With a growing urban population and a fall-force construction boom, China could prove to be a gold mine for U.S. companies looking to invest in overseas development projects.

At the U.S. China Real Estate Summit, which took place on Oct. 15-17, Chinese entrepreneurs tried to make this clear to their American counterparts.

Part of the reason the Chinese are looking for foreign partners has to do with burdensome government regulations. Developers have to pre-sell their properties in order to get financing for their projects. Since it is difficult to find domestic companies willing to buy office buildings wholesale, the Chinese are forced to sell their properties in small pieces, bringing rental values down and complicating management.

"Our purpose is to try to get capital to finish construction and sell our properties to Americans wholesale," said one Chinese developer, who has several office buildings under construction in Beijing. "We want to maintain a certain quality for our properties, to raise the value of our rents, [and a single buyer would allow us to do that.]"

According to members of the Chinese real estate industry, the sales market in the country is currently very healthy. And with the new construction underway in Beijing for the 2008 Olympics and the expected commitment to the World Trade Organization, the returns on foreign investments should be very high.

At the same time, American-based developers can make a profit by buying land in Chinese commercial business districts and creating quality office buildings. One such company, Treasure Holdings Ltd., is currently at work on a tower in the Luajazui district of Shanghai, which is expected to become the Chinese Wall Street.

"The Chinese government wants the financial services industry to be located in this area," noted Howard Hunt, an executive with Treasure Holdings. "Buildings here have 90% to 95% occupancy rates and feature high design, but they lack efficiency in space use, mechanic and electrical systems, and elevators. [That's where we come in]."

According to Hunt, his company's office building will meet only part of the demand for office space in the Luajazui district. Other American companies can try to replicate the venture, though land in the area is becoming scarce.

"We presented our project at a press conference last August and it received an extraordinary reception," he said. "The space was very valued by banks, [who want to he based in this area.]"

There are also joint ventures available for those interested in large mixed-use developments in the country's urban centers. What most Chinese real estate companies need is capital and they are willing to share the profits if Americans help them get their projects off the ground.

"The returns will be high and safe," said a member of the China Overseas Real Estate Development Corporation. "[All we need is a foreign partner.]"

Additional information on investment opportunities in China can be found at www.us-chinarealestatesummit.org.