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Tags: china | america | invest | united states

6 Reasons China Is Still Investing in America

6 Reasons China Is Still Investing in America

By    |   Friday, 22 January 2016 11:08 AM EST

Chinese are moving to America in droves. Why are they coming? What are the benefits?

I will share some of the many reasons why after years of living in China.

Education for Their Children

All parents, but especially Chinese parents, want to have the best education possible for their kids. The American education system is the top rated in the world. Chinese parents are planning ways to get their kids their before they’re even born!

So when they buy property in America, they can find one that has a good school zone.

Even if the child has yet to be born, they see this as a good long term investment and will wait it out until the kid is old enough to attend.

Diversify Out Of China

Many wealthy Chinese business owners want to spread out their cash a bit. Buying property is always seen as a solid long term investment. It is a true asset. The traditional Chinese investor likes to know that it is a true “physical” thing behind where they put their money.

So busy putting their hard earned cash into real estate overseas, they rest assured that there will always be something there. This doesn’t mean they will move out of China. It is the option. They have the option to move there if they want. Maybe something with the Chinese economy changes out of their favor.

Investment professionals sell this diversification of real estate in countries other than China. There are stories of some Chinese business owners who only invest in China and lose all their earnings overnight. Investment managers sell this story to Chinese buyers as a way to hedge risk.

Chinese Love American Culture

When I first came to China I had no idea that so many TV shows would be American sitcoms and movies. I learned that there are volunteer groups translating the movies to English to get more Chinese people to watch it.

Chinese society has been growing up with American culture. Hollywood puts out the best movies in the world, and Chinese are lining up at movie theaters to get first crack at the action.

This love of the culture also translates to the dream of one day immigrating to America. They will pick cities based on what they learned from a movie or TV show. They may not have time to go to the USA for a viewing of the property, and will make large investments based on pictures. They have the trust and the image of what they are getting.

While they have this property, they feel that they are now part of the special group of Chinese. They own part of the American culture, the American dream.

This is powerful for US investors and business owners to realize when selling to Chinese investors.

America Is Cheaper Than China!

This is one you may not believe, but real estate in America is cheaper than China! First tier Chinese cities such as Shanghai and Beijing have properties that command higher premiums than even Manhattan island!

How could this be? As the Chinese continue to flock to first tier cities, they're leaving behind their hometown. This lopsided effect creates higher and higher demand for a limited supply of city property. Many feel this trend is not going to slow down. Even with the already high real estate prices, more and more Chinese are moving into these big cities.

As inflation continues in China, prices of food and other basics is on the rise as well. There are stories from many Chinese who have moved to America showing photos on their social media of the clear skies and cheaper food.

Own the Land

In China, when someone buys the property, they can only lease it from the government for 99 years. This is a new policy, and no one’s lease has run out yet. So maybe after 99 years you will have to turn it back over to the government? Or maybe you will have to pay taxes? There isn’t a clear answer on what will happen after the lease is up.

While most are not thinking about it and figure it will all work out, many Chinese investors consider this an unknown and want to hedge it. Buying property in America you own the land rights outright. There is little question that government policies will ever question this in the future.

Use These Facts for Selling to Chinese in America

Keep these facts in mind when you approach a Chinese business owner or investor. They are in America and have considered these points in their decision making. Many of these points also reflect the cultural differences and buying habits.

Are you a savvy business owner who is catering to the growing Chinese population on American land?  Be smart and adjust their sales strategy to entertain these. Oh yes, and they love Hello Kitty as well!

Best of luck on tapping into the growing market of Chinese relocating to America.

Michael Michelini is an Asia business consultant with his firm GlobalFromAsia.com. He enjoys helping level the playing field in Asia for Western business owners trying to enter the complex Asia markets. You can reach him at his firm’s website GlobalFromAsia.com. 

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Chinese are moving to America in droves. Why are they coming? What are the benefits? I will share some of the many reasons why after years living in China.
china, america, invest, united states
Friday, 22 January 2016 11:08 AM
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