To break down these barriers many readjustments both

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To break down these barriers, many readjustments both in the market and within government were put forward in subsequent years. First it is necessary to look at structural problems in the market system. The explicit rules and regulations which form the framework of the market are essentially established by the administrative and legislative systems. However, these systems have their own problems. An ambiguous definition of power in the administrative system caused discord between different government bodies; notably, the State Land Administration Bureau and the Ministry of Construction, both of whom oversee the administration of land and real estate. Furthermore, the legislative system was inadequate which caused a heavy reliance on local legislation. This often resulted in confusion and divergence from central policies (Urban Real Property Law 1995). Some laws were impractical as they were equivocal and lacking a clear stipulation about penalties. The legislative process was found to lag persistently behind developments in the market. Finally, the implementation and execution of legislation was found to be ineffective. Hence, there is still a long way to go to establish a mature market system for real estate in China. In contrast to the structural level of market administration, the operational level is concerned with how rules and conventions are implemented and how the market
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27 actually functions within the structural framework. Significant operational problems in the Chinese property market include the lack of regulation of first tier land supply, irregular administrative behaviour, lack of development of subsidiary services for the operation of the real estate market, lack of a supporting secondary market, and the over-speculative nature of the market (Wong1999). Obviously, many of these problems must be viewed in the context of the reform process that has been going on in China. The uncertainty of issues and policy, weak legal enforcement, imperfect market mechanisms, unstructured administration system and decentralised administration can all be identified as contributors to these structural and operational problems. However, as a transitional market in a transitional economy, some phenomenon are only transient characteristics of the market while others will stay and form an integral part of the system affecting future development. Since the overheating of the real estate market in 1992 and 1993, the government has introduced many changes, including the re-centralisation of the land supply administration, promulgation of legislation targeting areas with problematic track records such as property rights, mortgage and land distribution methods, and clearance of unreasonable fees in real estate development and expansion of mortgage services (Wong 1999). These changes deeply influenced further development of the real estate market.
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