Sorry .. missed this thread. I could have sworn I'd answered it.
>> to rent or to buy a small , relatively cheap flat ?
Say you pay $1,000,000 for the flat. You'd be renting it at about $60-80K/year. If you purchase something that does need major renovation and can keep legal fees low and get a good mortage, your expenses on the mortage will be about 2.5-3% a year i.e. 25,000-30,000.
Assuming you sell the flat for $1,000,000 you would have saved a fair bit.
The major problem with the cost of the mortage is the 30% downpayment that the flat requires. This is virtually non-negotiable.
The permanent resident part is not a requirement. Some of the local chinese banks may need you to be a perm resident, but banks like HSBC, Standard Chartered have already calculated risks associated with that. They will probably be a little bit more strict on your ability to pay and your payroll record etc.