NPR’s Here and Now interviews Diane Francis regarding the Chinese real estate frenzy
This is my interview with NPR’s wonderful show Here and Now about the research I have done concerning the flight of capital out of China by its rich citizens into real estate abroad.
The reporter, Meghna Chakrabarti, has become interested in this phenomenon after reading my story in the Washington Post as well as her personal observances in Boston where buying is somewhat frenzied by Chinese expatriates.
The Chinese anti-corruption campaign has led many, with ill gotten gains, to spirit their cash out of the country in a hurry. But most Chinese are leaving to start a better life in the United States, diversify their investments and make profits in relatively cheap American residential properties.
But the vast majority of Chinese who are getting more than $58,000 a year out of the country in cash are circumventing currency controls. These have been like Swiss cheese in recent history and the Chinese outflow of illicit capital — also the proceeds of crimes like drug smuggling — is the highest in the world, an estimated $1 trillion in the ten years between 2002 and 2011. This has continued apace to the detriment of that country’s future and will, if unimpeded, hurt China’s economic prospects and drive real estate prices up in the United States, possibly beyond the reach of average locals as has happened in Vancouver and Toronto.