Wealthy Chinese Are Investing More In American Real Estate, Discouraged From Displaying Their Affluence In China
By Sophie Song
on July 11 2013 8:49 AM
China’s anti-corruption measures have been tightening since President Xi Jinping took over in December. The measures specifically target government and army officials, but as a result rich Chinese citizens are now wary of publicly displaying their wealth and turning to the less conspicuous option of investing in U.S. real estate.
While the word “anti-corruption” has always been thrown around by each administration, it seems China is serious this time. The former minister of railways, a man who owned 21 houses, was sentenced to a suspended death penalty on Monday for bribery and abuse of power, the first high-profile sentence meted out since the policies were announced in December. Other cases are ongoing and covered extensively in Chinese media.
There have been calls to investigate the property holdings of government officials’ children and relatives. An official with 21 houses under his name, dubbed “house uncle,” was arrested, as well as another with 24 houses dubbed “house aunt.”
Even those Chinese who made money honestly, in this political climate against conspicuous consumption, are careful not to display their wealth. One unexpected consequence is that the Chinese, by looking for a safe haven for their money, have become increasingly avid investors in the American real estate market.
We have friends who live in a prosperous neighborhood in the L.A. area who have noticed many very large, elaborate homes which are seemingly vacant. Less elaborate homes were torn down to build these. The apparent owners are Asian foreigners.