Real estate – Text
Check unknown vocabulary before you read the text:
Eager – very interested
Afoul – going against rules or guidelines
Threat – an indication of danger
Takeover – taking control over property
Be better off – to get better financially
Boost – to increase
Fall out with – to have a conflict
Qualm – a sudden disturbing feeling
Appeal to – to be attractive
Jeopardize – to risk
Point out – to make a comment about
Can China Help?
Why are wealthy Chinese so eager to get their money out of the country? It’s not hard to see — after all, thanks to the Internet, those wealthy Chinese know what’s going on in the rest of the world. For example, they know that Russian billionaires who run afoul of the government can lose everything overnight and end up in a cold prison cell. Those wealthy Chinese also know that there are other countries — such as Canada and the U.S. – where members of their extended families can enjoy much greater political freedom and protection from the threat of a government takeover of their holdings. And in China, that threat appears to worry the wealthy. According to NPR’s Morning Edition, Illinois is offering wealthy Chinese a green card in exchange for making a $500,000 investment in the U.S. This is a really clever way to make both parties better off — the U.S. gets capital to boost their economy and the wealthy Chinese get a safer place to park their money.
As one such wealthy Chinese told Morning Edition that working with the government is the key to getting rich in China. And if a wealthy investor has a falling out with the government, there’s a good chance that investor could lose his wealth and his freedom. And, the Chinese government has no qualms about going into competition with a private company that’s achieved success. Such a move may have cost Goldman Sachs (GS) its $120 million investment in a nylon ingredient company there, Cathay Industrial Biotech.
But such intellectual property-based investments do not appeal to Chinese investors. Above all, they value real estate as the best place to park their money. In China, parents want to buy homes for their children — and if they can afford it — their grandchildren as well. But the Chinese investors are frustrated by the legal system there which does not allow them to own land. Instead, the Chinese government leases the land to its citizens and lets them purchase the property. And the threat of losing the lease on the land jeopardizes the investment.
Morning Edition interviewed a financial advisor to the wealthy in China, a Mr. Yang, who pointed out the perceived advantages of the U.S. for Chinese investors. In the U.S., investors can own the land and the home and can pass them onto their children.