純大串 So a Chinese firm is buying the Waldorf Astoria in Manhattan. This is being taken by some as another sign of China’s wealth, prominence on the global stage, rise at the expense of the US, and so on. It may be closer to the opposite: a sign that opportunities within China have already faded. Start with the purchaser: Anbang Insurance. This isn’t Alibaba, a state giant like Bank of China, or a property investor like Shanghai Greenland. It’s not even a large insurance company. It has the money to complete the sale but it’s a bit of a strain, limiting Anbang’s expansion elsewhere. And there should be plenty of room at home. Using insurance premiums per person, China trails Jamaica, Namibia, and Croatia, not to mention richer economies. There are 1.4 billion people with a clear need for the life, health, and property insurance Anbang provides. Yet it is scraping up $2 billion for the Waldorf. What’s wrong with this picture? An obvious possibility is that, while Anbang sees American diversions as more attractive than what should be a boom in China, it’s an exception. While the evidence is certainly incomplete, it appears Anbang is closer to the rule. Chinese property investment in rich economies – the US, Britain, Australia, and so on – is soaring. By itself, there’s nothing worrisome about this. Chinese investment overseas can come from natural diversification of a growing portfolio created by economic expansion. But it can also come from the rising wealth at home seeking greener pastures. The timing, coincident with an economic slowdown in China, suggests a number of firms now prefer to go elsewhere. The parallels to Japan in the 1980′s are also suggestive. When Japanese companies started buying American property, it was taken by many to represent the eclipse of the US as global business leader. It turned out to be Japan’s sun that was setting. More disturbing, China is middle-income, not rich the way Japan was. It is too early in the development process for Chinese firms even to be torn between emphasizing the home or overseas markets. Anbang very well may not represent anything other than an obscure firm trying to make a splash. If it has a larger meaning, though, it’s not an encouraging one for China.
Posted on: Wed, 08 Oct 2014 19:09:33 +0000
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