TAIPEI (TheStreet) -- There goes another tract. A fleet of earth-movers behind a blue barrier is causing a private earthquake as it demolishes a row of Soviet-style apartment blocks.

In the place of that tract, theoretical but likely in just about any Chinese city, a developer has made deals to put up an office tower, a shopping mall or a housing complex possibly so palatial that even the White House turns pale.

Chinese officials had said they want to put a roof on property speculation to bring down prices that threaten social stability by making flats too expensive for many middle-class families. Common buyers couldn't compete with more moneyed speculators who would rent out property while awaiting appreciation and then sell.

So last year the central government set price controls, tightened credit and earmarked money for new low-income housing. This month banks cancelled 15% mortgage discounts, apparently to cooperate with government price-control efforts.

But China still hopes to increase the supply of real estate. That explains the projects that dominate city centers today as they have for a decade. Property builders, including foreign companies with a grip in China as well a Chinese counterparts listed offshore, should obviously gain from the increasing supply.

According to China's state-run China Daily newspaper website, the country's property market "has been recovering."

China's real estate development index logged a "small rebound in August" after sliding for 14 consecutive months in a row, the paper says, citing the National Bureau of Statistics. Property investment for the first eight months of 2012 was 4.37 trillion yuan, up 15.6% compared with the same period last year, the bureau said.

China's residential property sales volume surged in May by 73.7%, with prices up 1.6%, up from a sales volume trough in February.

The English-language paper aimed at molding foreigners' opinions about China added in its Sept. 12 article that major property developers were "accelerating" purchases of land and that local governments were eager to make those sales to earn money.

As if to justify the bull run of property developments, a state planning office said via Chinese media in August that property controls had been effective: Average home prices in 58 out of 70 cities had dropped in July. A lot of the new starts aren't in residential property anyway, and China needs to buck a broader economic slowdown. Everyone's happy, so let the earthmovers roll.

"The government has already met its goal curbing the excessive price growth," says Carlby Xie, head of research at real estate consultancy Colliers International in Beijing. For the first half of 2012, he adds," the demand was organic and healthy, mostly sourcing from owner-occupancy and that being catalyzed by the continued growing urbanization in many cities at tier III or even lower-level tiers."

It would be hard to imagine a China that discouraged new construction.

Developers are often owned by governments, which can make money fast by selling units even before they're built (Chinese often buy on faith, calling their flats "air houses" before they're built). Permitting offices are known for taking kickbacks, ensuring local officials a flow of extra income. Chinese have nonchalantly wrecked and rebuilt stuff for most of their history. Famed Beijing landmark the Forbidden City is a classic case.

The pursuit of new property also complements an aggressive quest for new infrastructure. Why build an airport in the desert or a superhighway to a cluster of remote farms?

Major American real estate builders are on China's blueprint.

Simon Property Group ( SPG - Get Report), which calls itself the world's largest shopping mall owner-operator-developer, agreed in March with China's biggest retail developer the Bailian Group (Shanghai trading symbol 600631.SS) to build a mall next to the Shanghai Disney Resort.

Taubman TCBL, a year-old China-based subsidiary of Taubman Asia-- itself a subsidiary of Taubman Centers ( TCO - Get Report) -- said last month it had formed a joint venture with the Beijing Wangfujing Department Store Group (trading symbol 600859.SS) to take a controlling interest in a mixed-use shopping mall in Xi'an, population 8.5 million.

Retail and residential projects should give the best returns to foreign builders, Xie of Colliers says, particular in mid-sized cities around Bohai Bay, in the Yangzi River Delta and out west in cities such as Chengdu and Chongqing.

Share prices of both Simon Property Group, an S&P 500 firm, and Taubman Centers have risen steadily since the global financial crisis and stand five or six times higher than their pre-crisis levels.

Share prices of North American property firms are generally strong, as their projects are supported in some cases by U.S. government stimulus measures, mortgage reduction plans and monetary easing. But watch for a market correction, advises Wojtek Zarzycki, managing director of Optimal Investing in Toronto.

Chinese companies listed overseas should see eventual wins, after a rough period of government controls, unless their fundamentals fall off a scaffold somewhere.

In Xi'an, the central Chinese city's biggest property developer, U.S.-listed China Housing and Land Development ( CHLN), is working on an 18-acre compound with more than 2,100 apartments. That just happens to be its latest project.

Real estate agent and consultant E-house China Holdings ( EJ) of Shanghai should naturally see business grow in sync with number of property sales. It's a robust company today after merging in 2009 with the online real estate business of giant Chinese Internet content provider Sina Corp. ( SINA - Get Report). Then this year it acquired online property service provider China Real Estate Information Corporation, or CRIC.

China Housing and Land Development and E-House China Holdings have seen share prices hover near financial crisis levels despite jumps of 500% to 600% in mid-2009. E-House dropped a clue as to why in a statement last year, saying government price-check controls had hurt business.

"Without the harsh purchasing policies and tightened lending control, I truly believe the price growth for China should have been much higher," Xie speculates.

For now, buy stocks in lofty foreign companies with China projects but keep an eye on the big Chinese names to see if their share prices start climbing.

At the time of publication the author had no position in the companies mentioned and owns no property in China.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.