http://www.nytimes.com/2015/11/29/business/international/chinese-cash-floods-us-real-estate-market.html?hpw&rref&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
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.
In the United States, the home-buying spree began on the coasts, where Chinese buyers snapped up luxury condos in Manhattan and McMansions in Silicon Valley, pushing up home values in big cities. It is now spreading to the middle of the country, where prices are more modest and have room to run.
The great property rush is part of the tidal wave of Chinese money that is pouring into the global economy and reshaping financial markets. In residential and commercial real estate, the new flow of cash is upending the traditional dynamics of buying and selling.
“The price of property in Beijing is very high, the stock market is crashing, and the real economy is not stable,” Mr. Du said of the environment in China. “The people here have some money, but they don’t have enough good ways to invest their money.”
2 comments:
This article demonstrates one of the larger problems the Chinese government is facing currently. With money leaving the country in order to be invested in other parts of the world, this has hurt the overall economy. With the vast amount that the Chinese people save, there needs to be ways in which this money can be invested back into the Chinese economy in order for it to grow and develop. With more and more infrastructure and investment being done in the US, China will need to find ways to become competitive in order to remain as a driving force in the world economy. With all the brilliant minds in China, an area such as Silicon Valley could be established and investment brought back into China instead of all the money flowing out. It will be interesting to see how China addresses this current problem and what actions it will take to solve it.
Many rich Chinese people started to invest in real estate in the US because the housing bobble still exists in Chinese market and it is more safe to invest in the US. However, the government can't really control these people.
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