The Rise Of China, And Why They're Buying Western Real-Estate
When we look back in history, the rise of China will without a doubt consume a fair portion of the 21st century. China’s booming annual economic growth has turned the nation into a superpower, and with it, created an enormous middle class within the People’s Republic. As Chinese citizens travel abroad and invest, the world will continue to see even greater increases in Chinese influence and power. Will China use its newly-earned money to integrate itself into foreign relations smoothly, or will its citizens take part in power grabs and horde their wealth? Can the United States and other world powers do anything to curb this influence?
Some believe that the ‘Age of America’ is coming to an abrupt end, as Western powers are beginning to be dominated by the East. Others state that as China grows more powerful and the position of the United States slowly declines, there are really only a couple of realistic scenarios.
China will use its influence and power to restructure the rules of the international order for its own benefit. If the Chinese go on this route, undermined western nations will start to see China as a threat to national security. This will result in rising tensions and conflict between China and the declining western nations. Such a distaste for the incoming power is to be expected, of course: If you’ve been the ‘top dog’ for as long as you can remember, then someone comes in and sweeps your legs, you wouldn’t like it very much either. In this scenario, China will continue to increase in power, while the United States continues to decline. The two dominant powers will fight over the regulations of the current international system, and its leadership as well. Slowly but surely, China will set in stone that their nation is the only superpower left, and the world will begin to be centered in the East instead of the West.
The transition of Western power to China doesn’t have to be disastrous for Western nations, however. China is dealing with an international system in place that is very different from the order that the United States faced post World War 2. China isn’t only dealing with the US – the rising power must confront a Western international state that is integrated on a global scale, and with it, face its deep-seated rules and regulations. Traditional means of claiming absolute power aren’t viable in the 21st century, either. World War 3 isn’t likely to occur with nuclear bombardment as was the fear during the Cold War, because every advanced nation has nuclear capabilities. World leaders realize that if one nuclear weapon is launched, many others are likely to go off – and there may not be a planet to rule over once the conflict is resolved. Rising powers in the past have used grand-scale epic warfare as a means to an end, but it doesn’t appear that China will be able to take this path. This will make it much more difficult for the rising power to overthrow the current international system that is in place.
After World War 2, the United States didn’t just go public and claim itself as a dominating nation. The country helped create institutions that brought economies closer together. America benefited from this new order greatly, and after the fall of the USSR, remained the only known superpower left. This began to change in the 1990s, as the Chinese state attempted to re-brand itself as a nation that would embrace capitalism, while still retaining many of its socialist aspects. US President Bill Clinton negotiated a nearly free and unregulated trade deal with the Beijing leaders, creating an enormous opportunity for China. North American manufacturers took advantage of this deal and began exporting jobs to China as quickly as they could, raking in unprecedented profits in the process. This act normalized relations with the Chinese, and soon the entire globe began exporting labor and importing goods from the fledgling nation.
China’s economy continues to boom, and as it grows, it’s taking up a much larger share of the global economy. With this success spawned an emerging middle class, and these citizens are spending their money abroad faster than they can earn it. In the United States, the Chinese have been purchasing luxury homes and condominiums on the east and west coasts. Properties in Manhattan, San Francisco, and Seattle are being bought up quickly, increasing the home values in large urban areas. In Canada, the Chinese are paying up to $1 million for modest homes in Vancouver and Toronto. In London, Chinese investors are purchasing properties in wealthy neighborhoods, including the financial district. Australia made the news recently as a Chinese sovereign wealth fund purchased nine office complexes – it ended up being one of the biggest real estate purchases in the country’s history. Citizens of China are purchasing major properties in large cities all over the Western world, and in the process are driving the prices up so high that locals can no longer afford it. From a native’s perspective, this certainly seems like a hostile power grab.
From the standpoint of a Chinese citizen who desires to live in a major city, these purchases are just a smart investment. In a wealthy area of Shanghai, 400 square-foot apartments can sell for over $1.5 million, not including the $50,000+ parking spot. The real estate bubble is insane in the city, with the average price of a new home rising by 30% in the first three-quarters of 2016. This has made Shanghai one of the most expensive cities in the world to purchase a home. The United States, Canada, and Australia are the top three choices for Chinese home buyers.
Western influence may be able to curb the power grab of the Chinese state, but there is no real way to stop its citizens from inflating urban real estate markets through outlandish spending. At the end of the day, business is business, and currency doesn’t have a race or nationality. Their money is just as good as ours, and short of western nations adopting fascist policies (which would disallow Chinese-born citizens from purchasing properties), their unquenchable thirst for urban properties will continue in the years to come.