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Tags: china | america | united states | real estate

WSJ: Wealthy Chinese Stashing Their Cash in America's Hotels and Strip Malls

WSJ: Wealthy Chinese Stashing Their Cash in America's Hotels and Strip Malls

By    |   Wednesday, 09 December 2015 10:22 AM EST

As China’s economy sputters, those looking to get their money out of the country reportedly are finding unlikely places to park their wealth, including U.S. hotels and strip malls.

For example, a small group of wealthy Chinese investors recently poured $10 million into a luxury condominium project in New York’s Westchester County, The Wall Street Journal reported.

“The investors’ objective, in part, was to move money out of China and into U.S. commercial property, said brokers who have arranged similar deals for wealthy Chinese in recent years,” the Journal explained.

“That goal became more pressing over the summer, after a plunging stock market rattled investors and a sharply slowing economy prompted Chinese officials to devalue the nation’s currency. Authorities beefed up enforcement of rules designed to keep money from exiting the country.”

Many wealthy Chinese “worry that Beijing could strip them of their wealth or inflate away their savings by cheapening the currency further,” brokers told the Journal. That motivates them to move large sums outside the country, ideally without drawing attention.

China has been the largest foreign holder of U.S. Treasurys since 2008, but more recently its buying interest in the U.S. has spread to Chinese companies and wealthy individuals, WSJ explained.

A Chinese insurer earlier this year paid $1.95 billion for New York’s Waldorf Astoria hotel — a record price for a U.S. hotel sale — after Chinese regulators relaxed rules for big insurers investing in overseas real estate, the report said.

But it’s not just the United States.

Chinese money becomes a major force in real estate around the world, The New York Times reported. The flood of money is likely to persist despite the current tumult in China.

While a currency devaluation and stock market crash have crimped the country’s buying power overseas, the resulting uncertainty is making many Chinese individuals and companies eager to invest anywhere except their home country.

In London, Chinese investors are purchasing high-end apartments in wealthy neighborhoods and big skyscrapers in the financial district. In Canada, they are paying $1 million for modest Vancouver bungalows. In Australia, a Chinese sovereign wealth fund bought nine office towers, one of the biggest real estate transactions in that nation’s history.

China and its expenditure of cash is a hot-button issue on the campaign trail as well.

Terming China as "number-one abuser," Republican presidential candidate Donald Trump has alleged that the Communist nation, along with India, is taking advantage of the US through its economic policies, the Times of India reported.

Trump said China was becoming a "major force" and is now creating problems both economically and through its behaviour in the South China Sea.

"If you look at the way China and India and almost everybody takes advantage of the US - China in particular, because they're so good. It's the number-one abuser of this country," Trump said in a recent debate. "China is a problem, both economically in what they're doing in the South China Sea, I mean, they are becoming a very, very major force," Trump said.

© 2022 Newsmax Finance. All rights reserved.


StreetTalk
As China’s economy sputters, those looking to get their money out of the country find unlikely places to park their wealth
china, america, united states, real estate
503
2015-22-09
Wednesday, 09 December 2015 10:22 AM
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