Chinese Buyers Replace Canadians as Top Foreign Buyers of U.S. Homes

This story is playing out all over the world. A while ago, the Chinese figured out that by pegging their money to the USD they could simply print more money, pay people more, and their citizens would flourish. It's a great strategy if you're an up and coming solution. Unfortunately, the ending has played out before. Crash and burn. With the burn part being a bloody conflict or war.

> the Chinese figured out that by pegging their money to the USD they could simply print more money, pay people more, and their citizens would flourish

This isn't correct. By maintaining a low exchange rate, people were paid less (the government acquired debt in lieu of a higher exchange rate) resulting in China (the people in China) having a lower international purchasing power.

Wealth would have no doubt similarly been accumulated by those that owned the factors of production, but a lower exchange rate deflated China's, and it's citizens', purchasing power, from foreign holidays to domestic essentials, such as oil, and even the price of corn, beans and rice (produced domestically, but prices set largely by international demand).

Why? The government was petrified by unemployment. Closing down government enterprises meant people had to be employed somewhere. Better to have someone working hard all day providing for their family and seeing economic progress (obstensively the East of the country) than back on the farm with too much spare time.

Something different is happening now - from my perspective the East is 'developed enough' and bitterly complaining about pollution. The inner regions, comparatively much poorer, complain about lack of wealth more than pollution - so move some production there (despite significantly increased logistics costs), mainly for the now much larger domestic market, and let development in the East slow (or, slightly, contract - cool the bubble that does exist).

For housing costs - surely things like the EB-5, which for a modest investment can grant a green card for you and your family are a major driving factor.

Better to see someone working hard to provide for their family than with enough time to protest inequality or otherwise take interest in their political fate.

The main issue is that wealth is very unequal in China. That low level official making 5k rmb/month is pulling in 20, 30, 40k rmb in grey money. They have to stash it somewhere, and overseas is safer when the government can make you an example at any moment.

Also, there are so few investment option in the mainland that if you do have money even from purely legit sources, buying a house overseas is probably much more sane than investing in extremely bubbly local real estate or stocks.

This whole thing almost rhymes with the Japs buying up lots of choice properties in New York, California, and Hawaii before their bubble burst back around 1990. They were more into commercial properties and golf courses, held by corporations rather than individuals, though.

Those caps went away quickly as soon as the market showed a little bit of weakness. I think they only remain in Shanghai and Beijing, and even then....

A lot of apartments are owned and vacant even in first tier cities; rents are incredibly weak compared to sale prices. I pay 7500 rmb/month ($1100?) for something that would go on the market for $700k! Top that off, volume in 2nd hand real estate is pretty low even here in Beijing (you hear "I would sell one of my apartments, but no one would buy it for the price I want" - doh!).