I think these articles are kind of missing the main point. I don't really care who buys the multi-million dollar houses since I'm never going to be in that market anyway.
The issue that we are seeing is investors (Chinese and otherwise) who are just plonking money in the real-estate market for normal homes. The homes we are seeing right now are pretty basic in the sense that a first-time home buyer would not be considering them if they had a million dollars cash in the bank. Yet these homes are going for all cash or 50% down -- I think the main reason is people with extra money have few options to park their cash; since asset prices across the board (and across the globe) are at all-time-highs.
You're right - the class of investor has shifted away from professionals and people wanting to leave China (the aspirational Chinese migrants we are used to) to extremely wealthy corrupt officials who are dumping their money everywhere they can put it.
Because property supply is constrained but their capital is seemingly unlimited, we are seeing properties fetch prices that are totally disconnected to reality. This is happening in Melbourne, Australia too where entire suburbs that used to be 'family friendly' at $800K are now seeing properties regularly sell for $1.5M to investors on the phone.
New York Magazine called it out for what it is - money laundering.
That was a very interesting piece to read when it was published recently, and it led me to follow the author, Neil Irwin, on other pieces he has written since (many others, here are two [1] and [2])
I have wondered if Neil Irwin and others are tiptoeing, insinuating, and getting close to but not quite saying, that inflation is taking place. Are the top dollars that we, programmers and hackers, earn today simply not worth as much as we think they are worth? That's probably an insufficient definition of inflation, but it's maybe as practical as it gets for someone who's just starting out. Perhaps I should move my (small pile) of hard earned savings into a thing before the cash value evaporates?
I have these same thoughts. My problem is I grow complacent, maybe "this" is the new normal. Then I remind myself that what goes must come down. Always does. The boom and bust cycle is very reliable.
There is clearly too much money so it seems likely that it or its value will get destroyed at some point. Buying a productive asset is never a bad thing but they take work.
The issue isn't that new housing isn't going to be built; in Vancouver, there are condo developments all over the place. The issue is that the vast majority of the housing in Vancouver consists of condo developments that are essentially unaffordable.
As a married, well-paid tech worker with a wife working a union job for a solid wage, we could live extremely well anywhere else, but in Vancouver the idea of buying a home is laughable. At our current combined income, we could 'afford' to buy a place if we had fifty thousand dollars in the bank, but most of the places we could buy are cheap, tiny condos that are barely large enough for the two of us, let alone a cat, a dog, and a baby on the way.
The current state of Vancouver is that it's cheaper to rent than buy, and the new developments going in aren't going to solve that problem at all. The new Vancouver House development in downtown Vancouver is being sold overseas first – to the wealthy elite in Singapore, for example – because it's essentially unaffordable to all but Vancouver's most wealthy (and they already have pricey condos downtown or sprawling mansions in the suburbs).
We rented a two-bedroom condo twenty minutes' walk from the downtown core for about $200 less than a reasonable mortgage would cost (assuming a down-payment larger than we have), but when you add strata fees and maintenance on top of that, it's far more cost-effective to own. It's possible to argue equity, but friends of mine who recently sold their condo to move to the UK approximately broke even on the five years they owned it. Others have lost money on condos they've purchased, but which haven't even finished being built yet.
Owning a home in Vancouver is unaffordable for most, and renting is slightly less unaffordable, but my rent in Vancouver was twice as much as my rent was in Montreal, and my salary certainly hasn't kept pace, and that won't change until more housing is built to appeal to the locals, and not the rich Asian investors/embezzlers and the rich Emirati – but that won't happen until it's more financially viable, and it's difficult to arrange that situation without inconveniencing (and angering) a lot of people, and having to field accusations of racism against Chinese immigrants (rather than classism against the rich elite who care nothing for Vancouver beyond its potential for real estate speculation).
Indeed. And SF residents push hard against building upward, unfortunately.
I live in Lower Pac Heights and recently got a notice in the mail that was urging people to oppose a new construction in the area. With the main reason being that it would be taller than the current height limit and establish a "dangerous precedent".
It is said that a big factor in the rise of property values in SF is the money coming in from China.
A realtor friend of mine here in SF was narrating the tale of a house (on Pacific Heights, one of prime neighborhoods) going for sale for $2.7M, and ending up being sold for $3.5M after a bidding war... between 2 Chinese men, both of whom were in China, and were buying the property sight-unseen, all cash.
I find it a bit smarmy the realtors who imply they can get your property attention from these out of the country investors. It reminds me of the old trick of the realtor showing you a picture of the buyers to enable discrimination without actually bringing it into the conversation.
That said, for a number of foreign nationals buying real estate is a more durable way of expatriating wealth because it is hard to 'freeze' and it can be difficult to claw back. During the Iranian crisis there was a student at USC in my dorm whose parents were sending him money by first buying a number of houses in west LA and then funneling the rent money to him as his monthly allowance. It seemed very creative.
Wait - so they could freely send money from Iran to the US to purchase houses worth millions, but they couldn't send thousands as allowance but instead had to rely on said houses' rent? That seems weird.
It was possible to move money but difficult. Doing so once in a lump sum meant you wouldn't have to worry about the reliability of regular bank transfers across borders or fear your accounts being frozen once you were successful a single time. Seizing a house is much more difficult than freezing a bank account.
Don't forget that it's in a realtor's best interests to stir up the pot about all this foreign money. "Bid higher or the Chinese will outbid you!!".
Apparently there was a scam in Vancouver, BC where a local realtor group was busted doing this exact thing.[1] They took a couple of their Chinese employees and had them wander around expensive homes with a story about buying up a ton of real estate.
Very smarmy. And they weren't the only ones doing it.
The other approach is figure out what the house is worth to you. Figure out what your max is before you start bidding and don't go above it when the bidding starts.
Good approach. To elaborate, bid the lesser of your value or market value. Always. If you feel the least bit of pressure, or feel there's any shenanigans going on, walk away.
Deeds are public record so you can always check to see if a single person/entity is buying up many properties in an area. Sites like whydontweownthis.com are making it easier to check as well.
I've heard the same. I had some friends who were house hunting and placed six bids on homes in the peninsula, only to be out-bid at least 20% in cash over the valuation of the home each time.
They ended up getting a house finally at 10% over, but only after convincing the person to close early and not list it. They claim it prevented the foreign investors from finding it.
That could be due to more robust private property protections, and the fact that China would have much more trouble confiscating property in US than cash in case of some dispute. That doesn't explain why anyone would want to bid up a specific city, though.
Apparently, the Chinese (from mainland) prefer San Francisco to other cities because SF already has a large and vibrant Chinese population, so it's easy to adjust to life here. It is also physically close to China.
The same goes for Vancouver, which the article briefly mentions.
A study in 2010 reported that of the 164 sales of $3M+ homes in Vancouver's West Side (richest area) and Richmond (largest chinese suburb of Vancouver), 74% went to buyers with Chinese last names. This number was 46% in 2008. Not the most scientific study for many reasons, including 2nd/3rd gen Chinese, but knowing Vancouver, that demographic doesn't intersect with the affluence much at all. This "study" wouldn't work as well in SF, but you get the point. There is a lot of yuan coming to the west coast.
Glen Waverley, Box Hill, Springvale and then the spillover. I can't get a look in. One house went for $200k over the asking price. Glen Waverley has supposedly ~25% Chinese but its a lot more in practice. There are also a lot of Indians looking in the surrounds. There aren't that many anglo people at the viewings at all.
I was talking to a mortgage broker and he said that in some cases the children were advance parties with parents money.
A lot of the estate agents are Chinese as they cater to the Chinese.
I work in Melbourne's Docklands area and the situation here is similar with many of the local RE offices obviously catering to the overseas Chinese market. From my office window I can see a nearby condo where 2 bedroom units sell for $550k+ but the ground floor commercial units are almost all vacant. And another building is going up next-door. In the other direction I can see a massive new tower going up next to the Crown casino in Southbank.
A month ago my neighbour sold her old 3 bedroom house for $650k whereas the same sized house I rent with a much nicer backyard costs me only $21k/year.
Australians are in for a shock when economic reality kicks in and the consequences of a speculative real estate bubble become apparent...
You may be right on both points, but the two are not necessarily related.
Wealthy Chinese people (who the article is about) generally do not live in Chinatown because Chinatown is a ghetto. The wealthy ones tend to live in the suburbs. The demographic of Chinatown just doesn't tell you very much about the demographic of Chinese people in the SF bay area as a whole.
There are a lot of other Chinese neighborhoods in SF besides Chinatown, though. There are a great many Chinese people in the Richmond district and also in the Sunset, which even has a small Uighir community). Chinese people make up a much larger share of the population in SF than in LA, IMHO. And there's a lot of other Asian enclaves around the Bay Area. OTOH there are a lot more Korean people in LA than in the Bay.
I remember back in the late 90s when Vancouver's Chinese community were mostly Cantonese speakers; that changed very quickly to mandarin after the HK handover.
Re-read the OP; that's exactly what he was saying.
A cantonese-speaking community outside of China generally means it traces its roots to pre-Communist takeover of the mainland, a time when most immigration came through the British controlled territories around Hong Kong.
The OP is claiming that SF's chinatown is more Cantonese than Los Angeles, the implication being that the more Mandarin speaking Los Angeles community has closer ties to modern mainland China.
Based on personal experience, I think that may have been true 20 years ago, but not so much today. At least outside of Chinatown proper, which I don't spend much time in.
He said Chinatown, not SF Chinatown, I assumed he was referring to LA's Chinatown, which definitely exists.
SF Chinatown is just a tourist trap these days. Many more Chinese live in the Richmond neighborhood and throughout the bay area. Also, many of the Cantonese speakers in the Bay Area (usually south bay) are actually from Vietnam (ethnic Chinese refuges who left during the Chinese/Vietnam war in the late 70s/early 80s). I assume that is quite similar to the situation in LA, but have no direct knowledge.
There is pre-existing immigration from british areas, but they have mostly diffused throughout the country and are probably on their 4th or 5th generations by now. If you meet someone in the states who speaks Cantonese, they are more likely to descend from Vietnam, or somewhere else in Southeast Asia, rather than Hong Kong. Though I once met a cantonese speaker who immigrated from...Belize.
But I guess you are right...over a few hundred years and many intermediate destinations they did eventually come from Guangzhou/Hong Kong :)
My parents moved to the US in the late 80s. A few years ago, they moved back to China. Most of my Chinese co workers from their generation also plan to retire back in China.
On paper, there is no comparison between American and China. Cleaner air, food, and water, better Transportation, more stable government, etc. But eventually these immigrants hit a ceiling at work or miss some intangible quality about their homeland.
Most of my Chinese classmates had plans to move back, but after they had kids there was just no way. It's not just the pollution, but school system and education fees. After they had a second and third child, legally they just couldn't go back.
Some say they will go back on retirement. But at that point it doesn't really matter.
This is the same dilemma that 1st generation Indian immigrants also struggle with.
Sir V.S. Naipaul compares it to being 'Shipwrecked'. You've arrived at a new land where you don't know anyone and build your life from scratch. You spend enough time here, but still don't "fit in" to the culture because you did not grow up here. Festivals are alien (ex: Halloween), holidays are alien (ex: Thanksgiving Day). You hit ceilings at work because the promotions in corporate america are mostly reserved for white men in their 40s. Your kids grow up here, and experience High School, Prom, College, Internship and such, and they have no idea what you are talking about when you say you miss the homeland.
You can't leave either, because you've put down roots, probably had some kids, and back home, things have changed dramatically, and even if you go back for good, you don't "fit in" there either, because you are always treated as the "NRI" - Non Resident Indian.
So after a decade or two,you are neither here nor there, essentially "shipwrecked" in America.
I don't know about the glass ceiling. Our CEO is from India (bet you can guess the company), many of our SVPs are Chinese. As a white male approaching his 40s, I'm not quite sure how promotion will work for me when all of our managers in my local site are ethnic Chinese (granted, I work in China and there aren't many foreigner datapoints).
In high school, I had a lot of ABCD classmates, and there parents were incredibly successful in the Seattle area, especially at Boeing. They had no problem going into management.
Cheer up, man. Who wants to fit in anyways? Kind of a platitude but it's true. The homogenization of culture (or asking immigrants to totally fit in to their new surroundings) are negative things for humanity.
Very true. I think it is precisely the not-fitting in which makes cultural mixture very very productive. Or in other words, cultural homogeneity is stagnation and unproductive.
Besides, did anybody realize how much chinese are contributing to high tech, battery tech from a chinese guy at stanford. Math from many chinese.
That said, of course the chinese government will want to take advantage of this like the russians will with their emmigres. The scale though may be frightening.
Hint, nobody really "fits in" in America. Even white natural born Americans are hardly the dominant group as they have many divisions within themselves.
Reading Naipaul was the very therapeutic for my first generation angst. On some level I now accept that I will now never feel at home - either in my country of origin or in the country that I have immigrated to.
Welcome to the human condition. It applies not just to first generation immigrants, but also multi-generation minority communities (try being black in America, pre-Obama) and lifestyle choices at the periphery of society (e.g. being openly gay).
The same thing happened to Japan a few decades ago. It's also happened to Korea more recently.
When your country is poor, moving to the U.S. offers great opportunities for you and your children. But as your country gets richer, the difference shrinks. At some point, you might find that your home country offers the same or better opportunities for you. As soon as the kids go to college (or get married), the parents are free to go back.
Too many elderly people coming back, though, could cause strain on a country's pension and welfare system. After all, they've never contributed anything toward a pension plan in their home country. Some people intentionally keep their old citizenship (even after decades of living in the U.S. and multiple opportunities to apply for U.S. citizenship) just so they can claim pension and welfare when they go back. Their lack of U.S. citizenship also makes them less emotionally attached to their new home and less involved in the public life of the U.S., making them even more likely to go back.
Worth mentioning: the US and Japan, as well as most first-world countries, have "totalization agreements" to take care of this. If you've paid into US Social Security for your entire working career and then retire to Japan, Japan pays you (fairly) equitably, and this is net out against e.g. me working for my entire career in Japan and then drawing US Social Security. (This includes two major question marks, like whether I'll be in the US at retirement and whether US Social Security will be worth enough to justify a postage stamp to get it.)
"... trial program was introduced in 2011 for overseas property purchases and emigration ... Once approved, the customer and the bank agree on an exchange rate before the funds are moved to an overseas account designated by the customer. Money destined for real estate would go directly to the property seller’s account to ensure the cash won’t be misused ...
HSBC ... offers its Chinese clients another way to access offshore mortgages while avoiding the cap on foreign-exchange conversion ... Customers deposit yuan with HSBC’s mainland unit or purchase its wealth-management products, and the bank’s overseas branch then issues a foreign-currency denominated mortgage using the China deposits as collateral."
Reminds me of the old comment from Deng Xiao Ping to President Jimmy Carter, whom first exchanged ambassadors between countries. Jimmy complained about China's restrictive emmigration policy and lack of human rights. Deng retorted "How many do you want? 10 million, 20 million?" That shut Jimmy up. But it may be finally coming true.
Chinese up and comers lack viable access to financial products. Couldn't it be said, that american home-ownership-interestees (or people in London) are paying a premium that is due to the lack of choices to store your earnings if you were born in the PRC? Due to the lack of good government in China?
I wondered, if the one-sidedness in profiting from globalization would bite us back in the west. Yes, industries were outsourced, middle classes eroded but overall most people could afford ever more goods for ever less money, as long as there are enough third world peasants to put in factories (Which still seemed like a good deal for both, the 99% percent of the first and the third world).
I suppose it is getting back at us in the form of absurdly sky-rocketing asset prices?
I had an ex-wife who helped move rich Chinese families to the US. She said their biggest concern was simply that you only get rich in China if you have a friend in the government and if you lose that friend or that friend loses power in the once every four years shake up, then your money gets taken away. Her clients bought million dollars homes, luxury cars with next years model, etc. all with cash. Typically they couldn't speak any English and moved to Chinese neighborhoods in Long Island and other places.
"Another aspect of this massive population outflow hasn't yet drawn much attention. Whatever their motives and wherever they go, those who depart will be shadowed by the organs of the Leninist state they've left behind. A sprawling bureaucracy—the Overseas Chinese Affairs Office of the State Council—exists to ensure that distance from the motherland doesn't dull their patriotism. Its goal is to safeguard loyalty to the Communist Party."
That quote reminded me of this[1] New Yorker article on the first case of "economic espionage." It's an interesting read and a look into a different kind of "spying."
The article mentions that China gets 6,895 investor visas whereas a country like South Korea gets 364 visas. Given that China is 1,350 mio. people whereas South Korea is 50 mio., the ratio is really 7.3 visa pr. mio. South Korean compared to 5.1 visas pr. mio. Chinese.
In the 80es there was a huge buying spree by the Japanese in California and other places. That stopped when Japan's economy popped in the early 90es.
Today realestate in China is priced extremely high and that creates a lot for surplus capital for the Chinese to invest. The high realestate price level of China may persist for a while but not forever and this buying will probably stop as the Japanese did.
>Last year, the U.S. issued 6,895 visas to Chinese nationals under the EB-5 program, which allows foreigners to live in America if they invest a minimum of $500,000. South Koreans, the next largest group, got only 364 such visas. Canada this year closed down a similar program that had been swamped by Chinese demand.
The fact that Canada closed down an immigration program where each individual would bring in $500k to the economy is just depressing. So much immigration law is just pure, unabashed racism.
If this were just about buying houses I understand that reasoning, but if its an investor visa, I imagine you need to actually put that money into something "productive".
Good money on the Chinese real estate bubble popping this year. It is already stagnating, even in tier one cities. Since the whole system is set up on valuations going up significantly each year, a bit of prolonged stagnation should bring the entire system down unless the government steps in with heavy inflation.
Nobody wants to be a loser in China, and no one will sell there house if they can't make 200% profit but the first-hand property has to get sold because those property developers are leveraged like heck. That is where you'll see breakage first.
Most speculators own 3+ apartments (usually unfinished and not even rentable!), so they have plenty of roofs over there heads. In Beijing alone, they estimate that some 40-60% of all apartments are not in use!
My guess is that the government will eventually go with a property tax, which will make it expensive to just hold property and do nothing with it (this is what they should have done to pop this current bubble). They won't do anything with the apartments that are underwater (no margin calls) but they'll reclaim anyone who gets behind on their mortgage diligently (and many will just walk away).
> A sprawling bureaucracy—the Overseas Chinese Affairs Office of the State Council—exists to ensure that distance from the motherland doesn't dull their patriotism. Its goal is to safeguard loyalty to the Communist Party.
This will only work for one generation. Once their children assimilate in the West, China will be foreign to them.
I know a few 1st generation Chinese kids (age 8-18). It was interesting to see some of them posting very pro-Chinese stuff to Facebook a few months ago when the Diaoyu/Senkaku Islands dispute was heating up.
Upper middle class Chinese have been buying "business visas" to immigrate to countries like US and Canada. You either transfer a business with certain threshhold of jobs/revenues or buy into a special bond fund devote to job./business creation. Typically these visas are around one million dollars. On the surface this sounds preferable to letting broke immigrant relatives who could become welfare dependents. Canada recently suspended their program due to a tenfold increase in applications, nearly all Chinese. The US's problem is they let private organizations create the investment funds, of which several have been pure scams.
I thought China is supposed to be cranking out millions of STEM graduates each year, some of which the US will import as H1B. Is it broken in the same way as the US education system, or is it all just a myth?
A better description may be that the Chinese system has a lot more pressure from all the competitions, while the instructions are not quite up to the standards at the college level.
Fwiw, I live in Sunnyvale and have seen this exodus first hand on several occasions. In fact, just yesterday, a friend from Shanghai moved into a modest home in Sunnyvale for $1m. Her husband owns a string of dry cleaning centers in Shanghai and obtained an investor visa ($750k).
Last month I hosted a friend from Shanghai who owns a successful factory. He is actively scouting for real estate in the $1m - $2m range for his son. He considered the area "very cheap" compared to Shanghai prices.
I know of several other Chinese professionals that are in the process of relocating to the Bay area or have already purchased a home.
It's a great way of laundering grey money earned through nefarious means within china (great word play, by the way). A lot of corrupt officials and business men skimming money that isn't there's using them to buy property in the states so they can escape china before getting caught (the USA and china don't have an extradition treaty).
Hi. I don't want to be pedantic, but you always make this mistake, and it just drives me nuts every time... " business men skimming money that isn't THEIRS using them to buy property"
"Their" indicates a person possessing something, as in "Their car was parked in the next street". "There" indicates a place, it's a bit like the opposite of "here", as in "put the blue shirts here, and the red shirts there"
"very cheap" - There is no need for the quote. The real estate price in China, especially in Shanghai has been skyrocketing in the past decade. The average apartment price in the city is close to 10k USD(per square meter) now.
True, and they have been surging again after the chinese government eased monetary conditions after the financial crisis in 2009 (remember).
But to Xi Jinpings credit -and I do not think he is getting enough of it- he has pricked it.
For those not actively following china. There is a big difference between the central government (Xi Jinping) and provincial and local government. In that the central government has much less control than one would think or is used to in the West.
Chinese leadership is implementing a lot of new policies which can be summarized under 'improved quality of economic growth'. So we will see how that goes. But it should have an impact on emigration.
He asked about the price of a property near Santa Clara, which was approx $900k. His response was, "oh that's very cheap". He was expecting about $1.5m. An interesting comment.
I heard the average sale price of an apartment in China was $500K...that is for the whole country, including 2nd and 3rd tier cities. Now, I don't know how believable that is, but if true...wow...oh...wow...
The interesting thing (in a bad way) is what will happen when these investors reverse their cash flow. If interest rates ever rise, they're going to want to move some of their money out of real estate. And that will depress housing prices across North America.
My realization from this is that although China might be owning the USA in some aspects such as defense, budget/finance and manufacturing, none of that matters if the people aren't happy, the food isn't good and the air is not clean.
As well as bitcoin which other people mentioned (and honestly I don't think this is that large right now), you can also just take bank cards out of the country attached to multiple local currency accounts in China and max them all daily. Otherwise, make business invoices from overseas to support the foreign exchange control bureau's approval of your transfer. Or just drive through Laos to Thailand with a car full of cash and enjoy your 90 day visa on arrival as a Chinese citizen. There's a lot of options.
The simplest way is the "youhuitong" or "preferential exchange" service the Chinese banks offer, which is a fancy name for "bribe us and we'll circumvent the transfer limits for you."
The picture captioned 'Visitors to Tiananmen Square struggle with Beijing's polluted air' shows someone wearing a _surgical_ mask rather than a _pollution_ mask. Surgical masks offer no protection against small particulate matter in the air.
It's almost strange and unexpected that the economic rise of China actually benefits the poorest most. The "rising tide" of wealth has lots of problems, and it is hard to compare agricultural China with the industrial, much more populous one, but in General, most Chinese are better off.
And despite that, the richest want to emigrate, because they can't get any "richer" in China. They need western infrastructure to grow their own utility and/or wealth.
They want their kids to be educated in English and attend universities in English speaking countries, which increases their career prospects not only in those countries, but also within China.
Also, a number of these wealthy Chinese seeking to emigrate are highly corrupt. Some of them have committed all kinds of bribery, fraud, and extortion to enrich themselves. Although corruption is rampant in China, it is also punishable by death, so these people are looking for a quick getaway route should they get caught.
>>They want their kids to be educated in English and attend universities in English speaking countries
Yeah, but why the West specifically? There are places like Hong Kong, Singapore, Australia, etc. with very good universities. While they can't compare with certain brand-name schools like Harvard and Yale, the quality of education they offer is near the top.
> There are places like Hong Kong, Singapore, Australia, etc
Hong Kong has been part of the PRC since 1997.
Australia is part of "the West" and along with New Zealand has had a high immigration from Asia for 30 years. When I grew up in Auckland in the 1970's only 1 or 2% were Asian. Now 23% are Asian.
International students coming to Australia for their education is a very big business. In total its about 22% of the student population, up to 40% at some institutions.
Domestic university students in Australia have no upfront tuition fees. We have a student loan type system called HECS (Higher Education Contribution Scheme) which is sort of like a student loan but effectively interest free (it rises with inflation via the CPI). Payments are made automatically from your salary but only when you reach a thresholded salary (~$50k). Its been a very good system in that it achieves a specific objective - accessibility of higher education to most Australians.* If your parents arent rich you can still go to a good university.
International students are not eligible for this system and pay full tuition fees. Fees vary considerably but you are looking at $50k-$250k depending on whether you are going for an arts degree or full medical school. It is a massive source of funding for universities in Australia.
There are occassionally some minor scandals, for instance every now and then an academic passes an overseas student that should have failed because of administrative pressure. There is also a real concern that research is second place and the institutions are becoming undergrad sausage factories churning out graduates. Universities here are certainly more like businesses than they were 20 years ago (see comment below about our current government). But overall I think its been very positive for Australia. It aids multicultural thinking and integration with Asia. It also subsidises the cost of education for domestic students.
* the current government are trying to change this so we have a system more like the USA. They have a fight on their hands.
Well, it's really all of the above, they go for the most prestigious English-speaking universities they can get into. The ones who can get into American Ivy Leagues (and Stanford) do, but the ones who can't, have other fallback options.
Parts of the western infrastructure that spring to mind are stronger environmental laws, stronger property and ownership rights, less corruption. I'm sure there's more.
However, there is nuance that is missed. Almost any Chinese person can get a passport, but whether they can get a visa for another country is a completely separate problem. So even though it's easier than ever for Chinese to travel abroad they are still relatively restricted in terms of travel options - but not because of their government, but rather the governments of other countries.
To me, 'wide open' borders also implies going in both directions, and China is also getting much more picky about who it is letting in.
I misunderstood the writer, thought he/she meant anyone from anywhere in the world can get a Chinese passport. But meant Chinese citizens which is a totally different story. Still wouldn't call a country's border "wide-open" because the citizens can get a passport.
The issue that we are seeing is investors (Chinese and otherwise) who are just plonking money in the real-estate market for normal homes. The homes we are seeing right now are pretty basic in the sense that a first-time home buyer would not be considering them if they had a million dollars cash in the bank. Yet these homes are going for all cash or 50% down -- I think the main reason is people with extra money have few options to park their cash; since asset prices across the board (and across the globe) are at all-time-highs.
http://www.nytimes.com/2014/07/08/upshot/welcome-to-the-ever...