ABSTRACT
The commercial real estate development market in China operates in a manner that is not completely surprising to the American lawyer who is familiar with US construction methods. China's construction industry is a mainstay of the Chinese economy and is projected to become the largest construction market in the world by 2010. Western borrowers, of course, often submit a construction loan application before they even acquire the land on which the structure is to be built. Some large retail malls are built as components of even larger mixed-use projects. Cash-flow lenders should be quite concerned with the developer's creditworthiness, history, and experience. By contrast, leases in Western markets are usually for considerably longer terms and frequently include renewal options. Tenants believe that landlords have far more power than tenants and have better connections with government officials and the police. For these reasons, tenants generally do everything they can do to pay their rent on time.
