Chinese investors, big companies, and insurers like to buy U.S. real estate. They get a great return on their money, and it gives those fat Chinese cats bragging rights. These well-heeled Chinese investors spent more than $2.6 billion on real estate in the United States in 2018. That the lowest total in the last six years, according to the Wall Street Journal.
But in the fourth quarter of 2018, Chinese investors sold more than $850 million in U.S. commercial property, according to a Real Capital Analytics report. That fourth-quarter sale was the third time the Chinese sold more real estate than they bought in the United States.
According to several Chinese news reports, the Chinese government wants to stabilize its shaky currency and help stop the slowdown in the nation’s economy. The government also wants to lower corporate debt in the process. The government has the right to make investors sell their offshore assets to protect the economy. China made sure these investors sell foreign assets by making it hard for them to borrow money. Some investors have to sell real estate to survive because of the economic slowdown.
China’s economy has been on the decline for more than two years. A slowdown in the manufacturing sector, slow consumer sales, and a real estate market that has few buyers are the gross domestic product villains that China wants to tame. But Donald Trump threw an economic monkey wrench in the taming process when he started a trade war.
Trump knew the Chinese economy was stronger than the American economy, and he knew a trade war would bring their gross domestic product down a percent or two. Instigating a trade war gave Trump the upper hand. But his trade war is also hurting America’s gross domestic product growth.
The U.S. economy will feel the impact of the trade war and the sale of these prized American assets in 2019. The real estate market in the United States is not as strong as it was before Trump became president, according to real estate executives.
American Consumers will spend less in 2019 because of the political uncertainty created by President Trump’s nationalistic agenda. The global economy is in trouble, according to economists. The Chinese want to ride out the financial storm that develops from Trump’s economic policies in China, not in the United States. They plan to win Trump’s trade war one way or another.