One of the most notable investigative pieces made by the New York Times of late was its inquiry into the operations of China’s Anbang insurance group, an obscure but well-connected insurance company. The look into Anbang by the Times was prompted by its $2 billion purchase of Waldorf Astoria, the iconic New York City hotel that made news in the Philippines during the time of the PCGG for this reason – it was the favorite of Mrs. Marcos whenever she was at the Big Apple.
Waldorf Astoria bills of Mrs. Marcos were part of the discoveries made by the PCGG. Thus, these promptly entered the public records and newspaper accounts.
But that was not Anbang’s first foray into big-time US real estate deals. In the first semester of 2016, Anbang made a failed $14 billion offer into the Starwood Group which generated a lot of unfavorable headlines.
The Times essentially asked this question. Why is an insurance group with a four-story office tucked away in some unglamorous part of China and with an opaque corporate ownership structure engaged in a real estate-buying spree in America? For what? For whom? Mentioned in the Times report was Wu Xiaohui, a key figure in Anbang who is married to a granddaughter of Deng Xiaoping.
Anbang is not the only corporate entity on a buying spree in the US. From 2010 to 2015, the total of US commercial real estate snapped up by Chinese buyers was $17 billion. But that was not the big story of those five years. It was the sheer volume of real estate purchased by individual Chinese buyers, who snapped up homes at an average price of $832,000 per home. The total? $93 billion, according to groups tracking overseas purchases of US real estate properties. The Chinese buyers bought homes at the most expensive locations: New York, Los Angeles, San Francisco and Seattle.
Over those five years, Chinese individuals and commercial entities poured $110 billion into the US real estate sector alone.
Two figures demonstrate how eager were the Chinese home buyers to own a piece of America. Foreign buyers, outside of the Chinese, just paid an average of $499,600 per home acquired. The Chinese upped the ante at an average home purchase of $832,000.
The buying surge, according to real estate groups, will intensify even with the Beijing government’s warning against moving too much currency out of China. The fact is this. Chinese want a foothold in the US and the first item of obsession is US real estate.
Right now, they have moved into other markets, such as Dallas in Texas and Miami in Florida.
The obsession of Chinese with US (and Canada’s) real estate is probably only topped by the sheer number of young Chinese enrolled at US universities, from the elite US colleges and universities to the schools in America’s backwaters.
Here is the result of a Google search of international students in the US.
1. China with 274,439 students
2. India with 102,673 students
3. South Korea with 68,047 students
4. Saudi Arabia with 53,919 students.
Don’t even ask about the number of Filipinos enrolled at US universities. More than 90 percent are children of billionaire Tsinoys trained at two high schools, the British School of Manila and the International School of Manila.
How about controlling a slice of Hollywood? Dalian Wanda, a China property and media group recently acquired Legendary Entertainment for $3.5 billion. The company produced films such as Pacific Rim and Godzilla. Hunan Television and Broadcast has invested into Lions Gate Entertainment, producer of the Hunger Games films and the popular TV series Mad Men. A group of 16 US congressmen wanted the investigation of Chinese money pouring into Hollywood.
Rich Chinese matrons are probably the most avid buyers of Hermes bags at US luxury stores.
The lust of Chinese buyers for things American, from real estate to Hermes bags, would have been a non-issue for Filipinos were it not for the decision of Mr. Duterte to move away from the long alliance with the US and the EU in favor of a closer relationship with China.
The pivot to China is taking place at a time when Chinese families with the means want to own homes in the US and want their kids of college age to get a degree in the US. We are moving away from the influence of America at a time the Chinese people are making a beeline to get a foothold of America.
It is both ironic and hard to explain why we are pivoting away from the norms and culture of a country that the Chinese so covet.
With China as our dominant ally, things would inevitably change. Our people-to-people relationship will be with China, its culture, its values, its norms. It will be a markedly different environment.
And the first thing we will learn about the Chinese people will be truly tragic – their obsession with things American. That makes the pivot to China both a tragedy and a farce.