Rich Chinese increasingly invest overseas
An employee counts money at a branch of Industrial and Commercial Bank of China Limited (ICBC) on July 26, 2011 in Huaibei, Anhui Province of China. Slower growth in China and the prospect of currency depreciation have many Chinese putting their money into places like Canada and the U.S.
Kai Ryssdal: Numbers out earlier this week from the central bank in Beijing suggest more and more Chinese investors are starting to take their money out of the country.
Where's it going? From Shanghai, Marketplace's Rob Schmitz has the details.
Rob Schmitz: Hong Kong, Canada, Australia, and yes, the United States. These are now among the top destinations for Chinese investors’ money.
Janet Zhang is an economist in Beijing at the research firm GK Dragonomics. She says it all started when China’s currency, the Renminbi, began to depreciate at the beginning of the year -- U.S. dollars started looking good.
Janet Zhang: So the domestic enterprises and individuals began to change their cash into U.S. dollars instead of Renminbi.
More than any time in the last five years, wealthy Chinese are moving their money abroad.
Shaun Rein is the author of “The End of Cheap China,” and managing director of China Market Research Group.
Shaun Rein: The days where China’s going to be growing ten, twelve percent a year are limited. And so people are now looking for diversification of income streams. For instance, I recently interviewed one of the largest real estate developers in China, and he’s now looking at building more complexes in Taiwan and the United States because he thinks he’s just not going to get the returns in China he’s enjoyed in the last decade.
Rein says rich Chinese investors aren’t only moving their money to the U.S. They’re moving themselves -- and their children -- out of China, too. Pollution, dismal healthcare, and a weak education system are pushing them out just as much as a sinking currency.
In Shanghai, I’m Rob Schmitz, for Marketplace.