While bullish on its own prospects, China is bullish on those of America as well.
The government has started to heavily invest in America, yet in a fashion more savvy than that of Japan in the 1980s.
China isn’t buying trophy properties that might incite anger from the American public. They’re also using local American partners, in order to provide even further political cover.
The largest Chinese investments in the U.S. have come from state-owned firms, primarily a $300-billion fund known as China Investment Corp. It initially targeted well-known financial companies, spending billions to buy stakes in private equity giant Blackstone Group and investment bank Morgan Stanley.
But after getting burned by the financial crisis that emerged in 2008, the sovereign wealth fund has been shifting to real estate. Its investments in the last year have included hundreds of millions of dollars in real estate-related funds managed by Oaktree Capital of Los Angeles, Goldman Sachs Group Inc. and BlackRock Inc.
The move into real estate appeared to be motivated by bargain prices. “In the past year, the U.S. real estate market seemed to have hit bottom and signs of recovery were obvious,” said Mei Xinyu, a researcher at the Ministry of Commerce in Beijing.
Chinese companies have learned that allying with partners tends to draw less attention, said Wenran Jiang, a China expert at the University of Alberta who has studied Chinese investments around the globe.
When multiple parties are involved in a deal, he said, the Chinese buyer’s stake gets diluted. “So you can’t report that the Chinese are taking over.”