Beijing may be having an uneasy relationship with Washington politically, but that is not stopping the Chinese from emerging as big investors in US property.
According to a survey conducted by the Rosen Consulting Group, a world-renowned real estate consultancy, mainland Chinese are estimated to have spent a whopping US$110 billion on US properties in 2015 alone.
Thanks to the influx of Chinese capital, the US property market has now fully recovered from the subprime mortgage crisis that led to a nationwide sector crash in 2008.
Cash-flush Chinese investors have also set foot in Vancouver in Canada, pouring hundreds of millions of dollars into its property market, pushing up prices in the city substantially.
For example, an average town house in downtown Vancouver now goes for 1.4 million Canadian dollars. According to some observers, Canada is now facing its worst home affordability crisis ever. Most Canadians blame it on Chinese home buyers.
As Chinese buyers are snapping up both average and luxury homes indiscriminately across the country and pushing up prices, it has provoked a widespread backlash from Canadian natives, particularly the average families who found themselves priced out of the market.
People are dismayed that their home ownership dream is melting away due to relentless speculative activities by deep-pocketed Chinese investors.
Canadian property agents are taking advantage of Chinese investors’ feeding frenzy for properties, reaping huge commissions. In fact many Canadians believe the local property agents are actually complicit in driving up property prices along with Chinese speculators.
The agents are accused of inducing their Chinese clients to make pre-auction offers that are sometimes up to 100 to 200 percent above market rate in order to force other local bidders out of the competition.
In the 80s and 90s, Canada saw an influx of tens of thousands of affluent Hong Kong immigrants. The immigrants raised a lot of eyebrows among locals with their luxury homes, fancy cars and expensive clothes. However, the Hongkongers were nothing compared to the super-rich Chinese millennials studying and living in Canada these days.
Nowadays it is not uncommon in major Canadian cities like Vancouver and Toronto to see Chinese teens rolling down the main streets in brand-new super cars such as Ferraris, Maseratis or Lamborghinis.
The extravagant lifestyles of rich Chinese students and their flamboyant behavior have made a lot of local Canadians uncomfortable.
Unlike people in New York and London, who have got used to the razzle-dazzle of rich foreigners, Canadians tend to be simple. Hence, many find the show-off by Chinese people deeply offensive.
Given this situation, local mainstream media often casts Chinese people in negative light regardless of their origins.
As a result, Chinese immigrants, be it the super-rich from mainland China or humble ethnic Chinese from other places who run small grocery stores or food takeaway joints, are becoming increasingly unpopular and even unwelcome among local Canadians.
The high-profile mainland Chinese in Canada have not only become talk of the town among the local population, they have also aroused the suspicions of the Chinese authorities back home.
Law enforcement agencies in China have already begun to re-examine hundreds of thousands of emigration cases to find out where the money of the wealthy emigrants actually came from. It is suspected that many corrupt officials moved their ill-gotten money offshore and sent their kids abroad to obtain foreign passports and look after the assets.
For many young Chinese aristocrats who are leading an extravagant life in North America, their days of carefree existence could be numbered because the Big Brother is coming after them and also their parents back home.
In recent years Beijing has concluded extradition treaties with several western countries in order to hunt down corrupt officials who have fled the country, and to curb the outflow of illegal capital under the pretext of emigration.
Unless the so-called second-generation rich (sons and daughters of the rich and powerful in China) who are living or studying overseas start behaving more humbly, their parents will surely come into more trouble from the anti-corruption authorities back home.
This article appeared in the Hong Kong Economic Journal on May 20.
Translation by Alan Lee
[Chinese version 中文版]
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