China’s Fall? Do Homefront Woes Signal the End to U.S. Investment? – January 21, 2016
Blank Rome
Description
Moreover, many Chinese have a personal stake in the U.S. A rapidly growing
number of wealthy Chinese entrepreneurs,
executives, and professionals send their
children to U.S. colleges and increasingly
to U.S. high schools.
Over 300,000 Chinese students were enrolled at U.S. universities in the 2014-15 academic year, according to the Institute of International Education, the highest number from any country, representing 31 percent of all international U.S. college students. Chinese nationals often buy condos for their college-age children to live in while studying in the U.S., or homes in suburbs with excellent high schools, sometimes sending a parent or grandparent to the U.S. to live with school-age children.
In fact, the Chinese comprise the largest group of foreign investors buying U.S. homes and condos, according to the National Association of Realtors, and they pay the highest prices, recently averaging $831,000. CCIM.com Chinese investors are also the biggest users of the EB-5 investment immigration program. Of the 10,692 EB-5 visas issued in 2014, 85 percent went to Chinese investors who invest in U.S, job-creating projects — often hotel and other commercial real estate developments — in exchange for permanent visas for their families. Beyond Real Estate Many expect the Chinese currency will continue to depreciate against the U.S.
dollar. Interest rates in the U.S. are expected to rise, while China continues to lower rates as an economic stimulus measure — multiple times in 2015.
That means investing in the U.S. may be a promising currency play. For Chinese investors, U.S. assets also represent an important hedge against political risk, such as fallout from President Xi Jinping’s well-known anti-corruption drive or unexpected events such as China’s recent, forceful government intervention in domestic stock markets.
The stability of the U.S. political and economic system allows a good match between real estate assets that can safely be held for the long term and the long-term liabilities of certain sectors of Chinese business, for example cash-rich insurance companies. Finally, on the U.S. side, investing from China is getting easier.
Geopolitical tension rarely affects local decision-making. Most cities and states are fully aware that jobs and other benefits will be created by each significant Chinese investment into commercial real estate, and are eager to help clear away red tape and get it done in their community. These factors will boost Chinese investment into U.S. real estate for years to come. Bet on it. Mike Margolis is a partner at law firm Blank Rome LLP, working with Chinese businesses and entrepreneurs operating in the U.S.
Contact him at MMargolis@BlankRome.com. January | February | 2016  .
Over 300,000 Chinese students were enrolled at U.S. universities in the 2014-15 academic year, according to the Institute of International Education, the highest number from any country, representing 31 percent of all international U.S. college students. Chinese nationals often buy condos for their college-age children to live in while studying in the U.S., or homes in suburbs with excellent high schools, sometimes sending a parent or grandparent to the U.S. to live with school-age children.
In fact, the Chinese comprise the largest group of foreign investors buying U.S. homes and condos, according to the National Association of Realtors, and they pay the highest prices, recently averaging $831,000. CCIM.com Chinese investors are also the biggest users of the EB-5 investment immigration program. Of the 10,692 EB-5 visas issued in 2014, 85 percent went to Chinese investors who invest in U.S, job-creating projects — often hotel and other commercial real estate developments — in exchange for permanent visas for their families. Beyond Real Estate Many expect the Chinese currency will continue to depreciate against the U.S.
dollar. Interest rates in the U.S. are expected to rise, while China continues to lower rates as an economic stimulus measure — multiple times in 2015.
That means investing in the U.S. may be a promising currency play. For Chinese investors, U.S. assets also represent an important hedge against political risk, such as fallout from President Xi Jinping’s well-known anti-corruption drive or unexpected events such as China’s recent, forceful government intervention in domestic stock markets.
The stability of the U.S. political and economic system allows a good match between real estate assets that can safely be held for the long term and the long-term liabilities of certain sectors of Chinese business, for example cash-rich insurance companies. Finally, on the U.S. side, investing from China is getting easier.
Geopolitical tension rarely affects local decision-making. Most cities and states are fully aware that jobs and other benefits will be created by each significant Chinese investment into commercial real estate, and are eager to help clear away red tape and get it done in their community. These factors will boost Chinese investment into U.S. real estate for years to come. Bet on it. Mike Margolis is a partner at law firm Blank Rome LLP, working with Chinese businesses and entrepreneurs operating in the U.S.
Contact him at MMargolis@BlankRome.com. January | February | 2016  .
