Chinese investment in the US to increase
It's logical to think the credit crunch has shut down liquidity and cash has become scarce, but in reality there is still a lot of global cash looking for investments.
The Chinese in particular are flush with cash derived in part from booming asset markets (check the Shanghai Composite Index above), and this week made a significant investment for 10% of Morgan Stanley.
And the Chinese yuan keeps on getting stronger vis-a-vis the US dollar. And today, China increased their interest rate to curb its inflation rate led by 12% economic growth, making the yuan even stronger.
Chinese invest in and push up their own stock market simply because they don't know where else to put their money. What happens when the Chinese investors diversify and move their cash from their stock market to US assets? Here are the latest articles:
"It's a good time for investment (in the US)," said Yin Zhongli, a researcher with the Financial Research Institute of the Chinese Academy of Social Sciences. "The credit crunch induced by the subprime crisis in the US could help buyers get a real bargain."
Base 10 blog confirms what most Vancouver real estate watchers know, citing a study that indicates 52% of new immigrants to Canada will purchase a house within three years after arrival.
The impact Chinese investors may have on the World Economy
Chinese real estate investors seem like an urban myth in California... I've heard more than one anecdote of all cash purchases by the Chinese in the Asian dominated cities of Los Angeles, yet the media doesn't confirm whether this is a big trend or not.
I expect that the new San Francisco downtown highrise condos will be a big attraction for Asians as they go on the market. Investors are used to buying such properties in Shanghai and Seoul.
It seems, that tendencies are currently keeping the way they are on Dec.2007...
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