RCA in the News

Coming to America: Chinese Capital Flow and Emigration

Reuters: Breaking Views / March 20th, 2015

Reuters: Breaking Views reports: Around 35 years ago, Jimmy Carter and Deng Xiaoping had an exchange regarding Chinese emigration to the United States. Fast-forward to today and we now see it coming closer to reality, though not on the 10-million individual scale.

According to global commercial real estate data and analytics firm Real Capital Analytics (RCA), global Chinese spending on real estate shot up from $1.5 (between March 2011-March 2013) to $10.4 billion (March 2013-March 2015). Anbang’s $2 billion purchase of the landmark Waldorf-Astoria is clearly representative of the increase flows of Chinese cross-border capital. In addition, Savills Studley estimates that 37,000 Chinese nationals are waiting for their EB-5 visa approvals. This would mean approximately 15,000 families, at an average of $348,000 per home, would equal at least $5.2 billion in additional investment.

While these numbers are clearly marking this trend, it is only a piece of the puzzle — between hard-to-track residential purchases and complicated ownership structuring, it is likely much more. Sensible diversification may prevail, though the uncertainty of the political and socio-economic climates in China will ultimately determine if this trend will continue in the years to come.