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Snatching Up American Assets

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Both Chinese and U.S. real-estate companies are increasingly organizing tour groups of Chinese citizens looking to buy depreciating American homes and businesses, according to USA Today.   

These trips are a growing trend: cash-rich Chinese citizens with little investment opportunities in their home countries are seeking bargain properties in the largest and most open market in the world. 

 

"We are aware of a number of Chinese strategic players who are interested in acquiring distressed U.S. assets in a number of industries," David Putnam, head of Asia for Houlihan Lokey, a Los Angeles-based investment bank that specializes in financial restructuring, told USA Today. "They have people looking on their behalf, and they are sending people over to visit."    

Recently, for the price of $3,600 apiece, more than 40 affluent Chinese citizens signed up for a real-estate hunting trip across the U.S. that begins Feb. 24 in Boston.  From there the group will head to New York, San Francisco and Los Angeles.  They will be shopping for homes in the range of $500,000 to $1 million.   

"U.S. house prices are lower now, and we'll also be looking at low-price houses auctioned off by the courts," says Zhao Xinyu, a manager at Soufun.com, China's leading real estate Web site and the trip's organizer.  

The allure of dirt cheap real-estate has attracted so much interest in China that many more trips are being organized, according to USA Today.  Some are looking for investment property, some are buying homes for their children to live in when they attend American schools and some are hoping to have easier access to American citizenship - which owning property in America will not afford them.   

In addition, Chinese citizens, firms and even the government are looking for greater access to American markets as well.  Chinese financial firms are busy looking for laid-off American talent while the Communist government recently sent recruiters to America looking to hire some 1,700 Americans to build that nation’s young but growing financial service industry.   

One interested buyer told the newspaper that it was simply a matter of stability and access.   

"Once Chinese accumulate some capital, we want to find an outlet," said Shen Yue, a Chinese film producer. "China is growing richer, but this is still a country run by the Communist Party, which inherently distrusts private property.”

This is just the latest example in the Great American Sell-Off.  The Chinese government, through its massive sovereign wealth funds holds more American debt than any other nation and has been increasingly honing in on American businesses to take over in recent years. While the government has been purchasing American assets for years, its citizens are now rapidly snatching up foreclosed American homes.  The Great American Sell Off is a direct result of American trade policies that ship our nation’s jobs to countries like China, increase the nation’s trade deficit to unsustainable levels and arm our economic competitors with the means to buy our nation out from under us.  Unless America makes a wholesale change to its trade policies, this is a trend that will only continue.

 

Dustin Ensinger graduated from The Ohio State University with a Bachelor of Arts in Journalism and Political Science. He is a contributing journalist for EconomyInCrisis.org.

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Unless America makes a wholesale change in its &qu... by William Whitten on Sunday, Feb 22, 2009 at 1:50:02 PM