Chinese nationals became the largest foreign buyers of US homes last year as they pour billions into American real estate, seeking safe offshore assets, according to a new study.
A huge surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than $110 billion, according to the study from the Asia Society and Rosen Consulting Group.
The sheer size of that total has helped the real estate market recover from the crash that began in 2006 and precipitated the 2008 economic crisis, they said.
And despite a slowdown due to Beijing's clampdown on capital outflows, the figure for the second half of this decade is likely to double to $218 billion, the study said.
"What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all real estate categories," including a "somewhat unique entry into residential purchases," the study said.
The asteroid mining firm Deep Space Industries (DSI) announced today that Metatron Global, A.S., an international investment firm with offices in the Czech Republic, has agreed to make a substantial investment in the company. The investment will enable DSI to accelerate its plans to prospect for resources at an asteroid in the near future, hire more top level leadership and develop high value products based on its groundbreaking technologies.
"DSI is not your usual company. Our business plan is not your usual business plan. It takes a special kind of investor to step up and support what we are doing," said DSI Chair Rick Tumlinson. "Metatron is that kind of company. Not only are they incredibly sophisticated, not only do they take due diligence to another level, they "get it". More, they are not just writing a check, but adding their expertise and energy to ours as we move forward, adding a new and important dimension to our team."
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Only three years ago, China National Offshore Oil Corporation (CNOOC), China’s third-largest national oil company (NOC), launched the largest-ever Chinese overseas takeover bid, offering $15.1 billion to buy Nexen Inc., Canada’s ninth-largest oil company. Together with China National Petroleum Corporation and Sinopec Group, China’s two largest NOCs, and other state-owned financial institutions, Chinese firms invested around $35 billion in Canada’s energy sector between 2009 and 2013, making Canada the destination of one-third of Chinese overseas energy investment in this period (China Economic Weekly, May 13). But the “Great Leap Forward” of Chinese investment in Canada has proven controversial, as evidenced by the intense debate over CNOOC’s acquisition of Nexen in the fall of 2012, and the recent criticism of the company’s oil leaks in Alberta (BNN, September 2).
With the rapid decline of oil prices in the past year and the heavily discounted energy stocks, Chinese equity holdings in the Canadian energy sector have also come under scrutiny in both countries, especially regarding the value and sustainability of some of the large projects. While Canadians continue to argue about the merits of Chinese capital inflow, Chinese companies are reflecting on the costs of investing in a stable market.
Chinese activities in Africa have expanded massively during the last decade. To be sure, most of this has been purely economic—such as bartering access to natural resources in exchange for loans.
But these money-making activities have grown so much in recent years, China is realizing it can’t keep relying on African governments to protect them—and the thousands of Chinese nationals who’ve moved to the continent.
Beijing isn’t giving up on making business deals in Africa. Far from it. It’s just that protecting those economic ties is turning into a job for the Chinese military.
AMERICA, an exceptional place, has long stood out for a willingness to take big bets on the rise of others. Post-war American governments devoted vast amounts of money, attention and military might to rebuilding or being the midwife of economies and democracies in Europe and Asia, with spectacular results. Of the country’s 15 largest trading partners today, 11 are former recipients of American aid.
Now Africa is set to deliver a fresh asymmetric shock to the global order, taking its place as the last great emerging market. Its population is set to double by 2050, and will be astonishingly young (see chart). Does Barack Obama’s America have the patience and confidence to welcome this change, harnessing it for mutual gain? Or is today’s America more like an old-world power, risk-averse, inward-looking and fearful of change? Africa may seem a sideshow now, but it is not a bad test of America’s standing in the world.
Speaking to The Economist on his way back from a speech in Kansas City, the president acknowledges that global balances of power have shifted since America “necessarily” moved to create a post-war order. Now, says Mr Obama, the global “ecosystem” belongs to everybody. If that brings greater competition, he argues that his country can still be “central” to the process of moving Africa into the next stage of growth. He lists America’s strengths, from the global standing of its companies to its traditions of transparency, accountability, the rule of law and property rights. America’s economy is based on ideas and innovation. “Our emphasis on developing human capital is something that Africa very much wants and we’re good at,” he says. Finally, Africa has “fascinating” opportunities to “leapfrog certain technologies and skip certain phases of development”. He recalls meeting small farmers in Senegal whose smartphones gave them profit-boosting news about the weather, market reports, even new seed technologies. America is “better than just about anybody else” at such smart applications of technology.
America has reasons to bet big. It enjoys more latent goodwill than ex-imperial Europe (Nelson Mandela said that the election of Mr Obama, the son of a Kenyan economist, was proof that people everywhere should “dare to dream”). America is more trusted in Africa than China, whose vast investments have at times sparked comparisons with colonial exploitation.
With many traders remaining on the sidelines looking for a price trigger, Bitcoin is witnessing yet another uninspired trading day, devoid of any major directional move or even a sign of breaking out of the narrow range it has formed. BTC/USD edged lower to $620.95 following a steady climb from $615 to $625, but once again failing to make any move beyond the support and resistance levels.
Technically, the price is still above the support level of $615 and buying is recommended at current prices with a stop-loss (closing basis) placed just below $615 for a target of $630. Short positions are still a big NO, given that there are no visible signs of a breakdown. While it may appear that the range has continued for far too long, trading should be avoided in anticipation of a major move.
It seems that investors are opening up to the idea of more Bitcoin-based exchanges in Japan following the terrible failure of Mt. Gox, which could possibly act as an important trigger, at least for a while. This had helped push the price down from a near $1200 to $340.
Currently, Yuzo Kano, an ex- Goldman Sachs employee, has raised $1.6 million in funds to fill the void left after the Mt. Gox collapse through another Japan-based Bitcoin exchange called bitFlyer. This development follows a similar announcement earlier this month by the China-based ATM manufacturer BitOcean and the New York-based Atlas ATS to launch an exchange in the Japanese market.
Meanwhile, in India Bitcoin supporters have ramped up their efforts to re-launch the cryptocurrency, following the red flag given by the Reserve Bank of India. Bitcoin start-ups such as Coinsecure and Unocoin, are working towards placing Bitcoin as a recognized currency and are confident that eventually, things will turn in favour of the cryptocurrency.
Chinese investment in the United States reached a record $14 billion last year, according to the Rhodium Group, a research firm. Across the United states, Chinese companies are opening factories or expanding existing ones and creating jobs.
OIL-RICH Gulf countries do not shy away from trophy assets. Qatar owns Harrods, 95% of London’s tallest building, the Shard, and Paris Saint-Germain, France’s top football club. Abu Dhabi is said to be trying to buy the Time Warner building in New York. But Saudi Arabia, the biggest oil power of the lot, has few foreign adornments to its name.
Gulf countries disclose scant details about their sovereign-wealth funds (SWFs), but Saudi Arabia is the most cautious investor, says Michael Maduell of the Sovereign Wealth Fund Institute, an American outfit which tracks them. Most of the $750 billion hoard it has piled up over the past decade of high oil prices is sitting at the Saudi Arabia Monetary Agency, the country’s central bank. It invests its reserves mainly in bonds and equities, rather than less liquid but more lucrative assets such as property. In 2008 the government set up a more adventurous investment arm, Sanabil. But it holds assets of perhaps $5 billion, compared with the Abu Dhabi Investment Authority’s $773 billion or Kuwait Investment Authority’s $410 billion.
“This strategy is explained by Saudi Arabia’s history and demographics,” says John Sfakianakis of MASIC, an investment firm in Riyadh. With 20m citizens, it has far less wealth per person than Qatar with its 250,000 citizens. Saudi officials are haunted by memories of the 1980s and 2009, when the price of oil plunged and the kingdom had to borrow heavily and sell foreign assets to finance its spending. Then came the Arab spring in 2011, to which its rulers responded with more handouts.
While most of the worldwide media outlets focused on Euromaidan protests in Kyiv since Ukraine’s withdrawal from signing the Association Agreement with the European Union in November 2013, the signing of a five-year economic agreement between Ukrainian President Viktor Yanukovych and several Chinese companies went unnoticed. In fact, while a group of activists were storming the presidential administration in Kyiv in December 2013, Yanukovych was not even in Ukraine. Instead, he was in China as the guest of honor of the Ukrainian-Chinese business forum in Beijing to authorize a memorandum on the construction of a deep-water mega-port in Crimea, contracted by the Ukrainian company “Kievgidroinvest” and the Chinese company Beijing Interoceanic Canal Investment Management.
A Chinese investment firm on Thursday announced plans to resurrect London's Crystal Palace, once the largest glass structure in the world.
The planned £500 million ($800 million, 600 million euro) re-creation by the ZhongRong Group is on the same size and scale as Joseph Paxton's original cast iron and plate glass masterpiece.
The Crystal Palace was built in central London's Hyde Park for the 1851 Great Exhibition of wonders from across the globe, but moved to a hilltop dominating south London in 1854.
The building, a marvel of the Victorian age, burnt down in 1936, although the area is still known as Crystal Palace.
The Italian-style terraces on which it stood are now empty and grassed over.
The plans involve turning the site into a major new cultural destination and restoring the surrounding 180-acre (73-hectare) public park through landscaping, planting and new facilities.
"London is renowned across the world for its history and culture and the former Crystal Palace is celebrated in China as a magnificent achievement," said ZhongRong Group chairman Ni Zhaoxing.
"This project is a once-in-a-lifetime opportunity to bring its spirit back to life by recreating the Crystal Palace and restoring the park to its former glory."
It has been the summer of biotech. After years of fretting that investors had soured on the high-risk industry, untested biotechnology companies are all of a sudden going public. This year, 24 US firms have issued initial public offerings (IPOs), pumping US$1.8 billion into the industry. Their stocks rose an average of 20% on the first day of trading. Another eight companies plan to follow suit in the coming months.
If they do, it will be a record-setting year for biotechnology. Each new deal has amped up the excitement. But there is also anxiety that the field could be in a bubble. “It will be a cycle, and this cycle will eventually run its course,” says Noubar Afeyan, managing partner at venture-capital firm Flagship Ventures in Cambridge, Massachusetts. “These things end up appearing and disappearing for reasons that people can only explain in hindsight.”
Investors are betting big on cleantech. In the first quarter of 2010, companies raised more than $1.9 billion globally in 180 deals, a new high, according to a report released last week by the Cleantech Group and the accounting firm Deloitte.
Investment leaped 29 percent from the fourth quarter of 2009 and 83 percent from the same period a year ago, with both venture capitalists and big corporations (among them Royal Dutch Shell and General Motors) showing an interest.
But while the number of deals set a new record — the previous peak was 165 deals in the fourth quarter of 2009 — the total value is still $1 billion off the high, which was in the third quarter of 2008, and the deals are much smaller in size.
"The first three months of 2010 represent the strongest start to a year we have ever recorded," Sheeraz Haji, president of the Cleantech Group consultancy, says about the deal volume. But the environment is still tough for many cleantech companies. "You have less dollars per deal going into startups, and plenty of big companies are struggling to raise the capital they need."
Investors were sweet on the transportation sector, in particular electric vehicles. A $350 million investment in Better Place, a Palo Alto-based company that is building a network of charging stations for electric cars in Australia, California, Canada, Denmark, Hawaii and Israel, lifted transportation to a record quarter: $704 million in 27 deals. Two other California start-ups – Fisker Automotive and Coda Automotive – picked up $140 million and $30 million, respectively.
Why the interest in transportation, which requires huge outlays of cash? It's cooler, Haji told the Daily Finance. "People are watching exactly where Nissan's lease price is at," he said, referring to the company's pricing of its Leaf electric car. "There's anticipation that there's a market there."
The solar sector recorded $322 million in 27 deals, and investors poured $217 million into 39 deals in energy efficiency. The top three deals all went to lighting start-ups.
"Lighting is hot," Haji said in a statement. "A lot of entrepreneurs and venture firms are looking for lighting deals."
North American companies received 81 percent of investment globally, with Europe (including Israel) picking up 14 percent; China, 4 percent; and India, 1 percent. North American companies raised $1.5 billion in the first quarter. California-based companies topped the list, pulling in more than half of the total investment: 57 percent, or $870 million. Oregon was a distant second, with $179 million or 12 percent of the total investment.
There were 13 clean-tech IPOs during the quarter, which raised a total of $1.5 billion. China led the way with eight offerings. In February, Tesla Motors (founded by Inc.'s 2007 Entrepreneur of the Year Elon Musk) filed its IPO documents – following filings by Fremont, California-based Solyndra, a maker of skinny tube-shaped solar panels for commercial rooftops, and Codexis (No. 924 on Inc.'s 2009 Inc. 5000), a Redwood City, California company that crafts designer enzymes for biofuel production.
no time again...
