Where are Chinese retail Investors putting their money ?

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Chinese retail InvestorsThis year, South Korea, Thailand and Japan are the top 3 countries for China’s rising middle-class travelling overseas.

South Korea received a boost from its popular soap operas – which China’s first lady, Peng Liyuan is even a fan of. Japan’s weakened yen makes for affordable travel, and Thailand became more attractive to Chinese travellers due to its loosened visa requirements.

For China’s affluent, the US, Australia, New Zealand, Europe and Dubai are considered choice destinations, largely due to evolving Chinese luxury consumer behaviour, whereby wealthy Chinese are beginning to seek “luxury experiences” over tangible luxuries.

Chinese retail InvestorsPerhaps more interesting is that many of these countries are also in the Top 10 destinations for wealthy Chinese property buyers.

The US is the #1 real estate destination for Chinese HNWIs, with New York, Miami and Los Angeles as the top three favourite cities.

American universities are also most favoured by the Chinese, which is important since education drives Chinese buyers seeking property abroad and is the main reason for affluent Chinese looking to migrate.

The UK, which is the next preferred destination for education, is #4 most popular for overseas property investment,while Australia, is a favourite for wealthy Chinese buyers, students and tourists alike. Chinese students make up 28.9% of Australia’s international students,and a record-breaking 760,000 Chinese visiting Australia last year.

What does this mean for Latin America.?

To date most investment from China into South America has been Sovereign. ( ie Government related ) This has been spread across most countries with widely publicized investments in Argentina and Venezuela. Mostly to gain access to primary products. ie oil, grain and other basic commodities.

As you can see above the main attraction for Chinese middle and upper class retail investors who are English Speaking to gravitate to places with high levels of education, high standards of living plus strong a emphasise on the rule of law.

This rules most of Latin America out except for Chile and Uruguay. However, these are very small economies. In the future, it is inevitable that as China’s economy continues to depend on Latin America for a significant part of its commodities imports they will want to take a more active interest in the societies they have a vested interest in.

If they feel comfortable with the relationships then we will see more retail investors coming this way. We would not expect this to happen within 10 years. Why? The worlds third largest economy Japan has a long history of investing in South America ( mostly Brazil and Peru ) but from a retail point of view they are still minor players.

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