Real Estate: The Growing Trend for a Shrinking China
China, the once fledgling powerhouse that burst onto the international market only 11 years ago, is beginning to outgrow its backyard and is yearning to see what else is in the neighborhood.
Last time we discussed business basics for the mainland and essential information necessary to get your business going. However, the teenaged China is now offering a plethora of opportunities outside of its borders as well, that the savvy business person can take advantage of. Evidence of these trends is observable even with The Industrial and Commercial Bank of China, which, as of 2008, planned to double its assets outside China within three years, according to an article by Reuters.1
Real Estate, for example, offers a robust and rewarding opportunity and you do not even need to set foot inside China’s borders. According to a recent New York Times article, “China’s banks have poured more than $1 billion into real estate loans in New York city in the past year.”2
Chinese investors are buying up everything in sight- from luxury apartment complexes to valued and cherished commercial space at Ground Zero. Clarence Kwan, a senior partner at Deloitte adds, “in terms of overall flow from China into the U.S., many of us believe that it could accelerate very quickly, and it could even parallel what Japanese investment did in the mid-‘80s.” 2
If there were any reservations about Chinese follow-through on these real estate business ventures, consider this: it has been confirmed that some Chinese businessmen fly into New York for the weekend and purchase property in cash to seal the deal immediately before flying back out.
In a grand effort by the Chinese central government to diversify China’s foreign-exchange holdings (away from the devalued US dollar and overall US economic woes), opportunities to tap this market are endless. New York’s hotel and restaurant business section alone are reaping the benefits of the increase in Chinese capital with 45 percent increases in tourism from China in 2010 from the previous year.
In short, while business in China is booming, there are innumerable opportunities to do business with the Chinese on American soil as well, with real estate being merely one example. Check with us again as we continue to explore other opportunities and essentials for doing business in China.
Marc-Anthony Isaacs is currently a graduate student of Pacific International Affairs at the University of California, San Diego’s school of International Relations and Pacific Studies (IR/PS) studying international management. Having worked in both Japan and China for a number of years, he now lends his skills and experience to the Rowland & Associates team as a summer intern.
