ABSTRACT
The process of relocating current occupants of property and demolishing existing structures is a complex and expensive one. This chapter summarizes the topic of demolition and resettlement, which comprises an important piece of many real estate transactions in China today. Once the government has removed the existing occupants from the land, it is in a position to transfer the land to a developer. In addition, the government has succeeded in driving the price higher by going to the trouble, expense, and inconvenience of demolition and resettlement. In the earlier days of the modern Chinese real estate market, the government occasionally was willing to bear much of the business risk of a relocation and demolition project on its own. The government establishes a minimum price that allows it to recoup its earlier demolition and relocation costs, although market-driven bids are likely to exceed this minimum by a substantial amount, particularly if some time has elapsed between the acquisition and the sale.
