The “Chinese Dream” Come True: Gobbling Up Assets Overseas

Wolf Richter's picture

Wolf Richter

The “Chinese dream” is the dream of the whole nation and also of every individual Chinese, explained Fu Ying, chairwoman of the Foreign Affairs Committee of the National People’s Congress. The slogan had been coined by President Xi Jinping after he’d ascended to the throne of the Communist Party. It would benefit the world, she said. But for the richest Chinese, it has already come true.

So Chinese real estate mogul Zhang Xin bought a big stake in the iconic 50-story white-marble General Motors Building in Manhattan. A few days ago, Shuanghui International Holdings, China’s largest meat processor, offered to acquire Smithfield Foods, the largest pork producer in the US, a couple of months after 16,000 dead pigs floated down the Huangpu River into Shanghai. Maybe, Shuanghui wants to obtain Smithfield’s expertise in food safety; or maybe it just wants to find a place outside China to park a few billions.

Other industries have seen similar purchases, particularly the automotive component sector. Or what’s left of it in the US, as many component makers have already moved their production and in some cases even their design centers to China in search of cheap labor. It shows: for the first four months of 2013, imports of Chinese auto components have swollen to over $5 billion and will soon be in second place, behind Mexico but ahead of Japan and Canada. Delphi, GM’s former component division, and Visteon, Ford’s former component division, have but skeleton crews left in the US [for these dark aspects of deindustrialization, read my article....  The Currency Wars: Now US Automakers Are Squealing].

The Chinese have also gone on a shopping spree in Germany, where they’re interested in the Mittelstand – family-owned companies with innovative technologies and high-quality manufacturing in worldwide niche markets. The most prominent was the acquisition of Putzmeister, long the world leader in concrete pumps (here is my take). The Chinese have been buying in each country according to their perception of what that country is famous for, and what is available to Chinese buyers without too many political hassles.

So in France, the Chinese have a different shopping list – in late May, for example, Fosun International, one of the biggest privately owned Chinese conglomerates, partnered with Axa Private Equity to make a tender offer for vacation-resort operator Club Med, of which both are already the largest stockholders. There were other deals for what France is known for in China: châteaux and their vineyards.

It just emerged that Goldin Financial, based in Hong Kong, bought three châteaux and their prestigious vineyards in Bordelais, a brand-name wine region in southwestern France: Château Le Bon Pasteur in Pomerol, Château Rolland Maillet in Saint-Émilion, and Château Bertineau Saint-Vincent in Lalande de Pomerol. A few weeks earlier, a Chinese architect had bought the Château La Fleur Jonquet in the Graves region.

In 2008, the Chinese made their first acquisitions in Bordelais, each less than €5 million. Over the years, the pace quickened. By 2011, they’d picked up 21 vineyards, some of which had been on the market for a long time. In 2012, they added another nine – including a Grand Cru Saint-Émilion. And so far in 2013, they’ve snapped up six more.

The Chinese are now in second position of foreign owners in the region, behind the Belgians with 45 vineyards. China is already the number one importer of Bordeaux, with 538,000 hectoliters, or 10% of production, more than double of runners-up Germany, Belgium, and the UK. They’ve also gone shopping in other wine regions, including Burgundy where a Chinese investor bought the Château de Gevrey-Chambertin last summer.

It’s the same story around the world. The “Chinese dream” come true. For some. That concept “came just in time,” said Fu Ying while addressing the Asia-Pacific Roundtable in Kuala Lumpur, Malaysia. “It reflects the reality in China and people’s expectations, and serves the need to unite the people to achieve a higher objective,” she said.

A higher objective? Corporate chieftains from the US, Europe, Japan, and elsewhere have invested untold billions in China over the years to offshore production from their home countries. As a consequence, the US, most other Western countries, and more recently even Japan, have run up huge trade deficits with China. And hot money washed ashore, even while the Chinese government created an enormous credit bubble that could effortlessly fund just about anything, from the largest high-speed and money-losing rail network in the world to entire ghost cities, no matter how impossible it would later be to service this debt.

That bubble is there for all to see, more flamboyant than ever, scaring even the government – and the rich. Those who can, while they still can, try to take at least some of their money overseas where it would be safe even during periods of financial or political instability at home.  

But bubbles are everywhere. An economic slowdown is looming over the global economy, but no one seems to care, as stock markets continue to reach new record-highs – giving investors false hopes of economic growth. But how long can this mirage actually last? Read.... A Mirage Called The Stock Market

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southerncomfort's picture

China buys european wineries.  China adds tariffs to wines from Europe.  crazy world.

Urban Redneck's picture

In this game, stock is more important than flow, and the long game is for dominance of the limited stock of tangible assets.

CheapBastard's picture

"Overseas Assets" (esp those 'assets' nailed to the ground) will be the first seized when friction builds.

NihilistZero's picture

I would remind the good Chinese expats of what America did to the Japanese in WW2.  Those lovely "safe assets" you bought are yours, until they aren't anymore :-)

IamtheREALmario's picture

Remember when those "smartest businessmen in the world", the Japanese, bought Pebble Beach? It is amazing how smart cheap labor makes one look.

kchrisc's picture

All those dollars are coming home to roost with a Chinese accent.

One day we will also be shocked to learn what they own in secret.

It is rather fun watching the paper-tiger US gov putting themselves between a pissed off American people "rock" and a Chinese "hard place."

shovelhead's picture

Look at the bright side...

Jobs will be coming back to America along with those T bills.

Unfortunately they will be for making cheap flip-flop shower slippers and plastic toys for the rest of the world.


proLiberty's picture

They are welcome to buy our fixed assets.  We get to liquidate and deploy the money elsewhere and they bought something they cannot take away.  

Quantum Nucleonics's picture

25 years ago everyone fretted over Japanese investors gobbling up US trophy assets, which have mostly been taken back by creditors for pennies on the dollar.

RafterManFMJ's picture

Past performance is no guarantee of something something.

And you'll make note the Red Chinese are buying up critical IP and technologies and productive assets, not 'trophy properties.'

falak pema's picture

China has its own agenda and Africa is now a MAJOR bone of contention between West and East for land, energy and minerals.

The rape of africa carried out in the 19th century by Europe now continues on a much larger scale. 

I hope the African people wake up before it too late.

Nue's picture

The Africans are too busy raping each other over minor tribal differences to notice.

disabledvet's picture

"let's start buying businesses and start phucking with them." works were me. go for it.

JOYFUL's picture

As another day in Byzantium winds down... and ZH continues to carefully tiptoe around the biggest sleeper story of this 2nd decade of the new millennium*, the events unfolding at the meeting point of Europe and the Asian continent take on a momentum which puts all the daily diversions of the western fallen lands into a pallor of insignificance...

into which random storyline here on the 'all new' ZH will I be forced to choose to insert the latest dispatch back to Western Gulagistan,.. since the editors have apparently decided to enforce a no fly zone on everywhere between EUROstan and the Great Wall of China? Well... Wolf has written a fine piece of prognostication with international slant... one couldn't ask to keep better company!... report proceeds below...

Now that the very distinguished M K Bhadrakumar has picked up the scent [] laid down on these very pages a day or so ago, we can proceed further on our pursuit of the huge pachyderm in the darkest depths of the Mirkwood-like forest of false-flaggin follies which the talmudist sorcerers had hoped to conceal from view.

The total and utter collapse of the attempted creation of a Libya2.0 in the Syrian situation has left the Telaviv\London\Washington axis of evil in a state of despair... and being the total twits that they are, of course the first reaction of the collective 'leadership' of said axis has been to throw the boatman overboard...

as MKB somewhat overcautiously alludes... the events in Istanbul have a dynamic... if not origin... pointing to the effort of a dying ZATONIC alliance to switch horses mid-race... from the problematic Tayyip "Sultan Selim" Edrogan , who was beginning to get too big for his britches... to the more graceful(and grateful)Gul&Co... who as good "Gulenists" of the supposedly "moderate Islam" kind peddled by Langlely as the future favorite... appear ready to inherit the mantle being snatched from the man whose job it was to replace Assad with yet another dog's breakfast of ACIAdo\playdo puppets who worked in the pay of the crypto-judaic sheiks of the Gulf State sultanates which Tayyip aspired to emulate.

Does all this mean that the people... young n old... who turned out in spontaneous gathering to voice their dissent of a gathering police state's heavy handed oppression were merely more tools of State Dept\NGO phony freedom manipulations? No.... their declaration of independence from the desired disinfo path of the idiotic "ARAB SPRING" narrative was true and real. And it has sent the 'usual suspects' reel-ing. But in the words of one of the most famous of dual-citiiZended traitors to the Merikan Republic currently controlling the Chicago rackets.... they "never let a good crisis go to waste!" Agents of the moneypower are everywhere on call to jump to a call to ‘stir the pot’… in capitals like Ankara particularly.

The careful reader in the fallen lands of the west will ask themselves, when reading this … just what it is that makes such a groundswell of popular disgust with politics as usual possible in a far-off place… when it is clearly impossible to imagine such a popular groundswell of protest occurring in the heartland of the supposed “democratic west”///just more cognitive dissonance to digest!\\\ We are close to the completion of a period of transition in which the mighty will fall so far… so fast as to take away the breath of those whose imaginations refused to get caught to the really real deal…

And what’s going on in Anatolia of the moment is a precursor to that reality. Stay tuned… you have been pre-selected… to live in ‘interesting times’ … and so it shall be! Things only get into higher gear from here. I mentioned the “Gulenists” above… with that term as key…in our next dispatch we shall unlock the entire pandora’s box of the Boston Hoax, a certain employee of the CIA with a 'special interest' in Muslim mischief…and  the ZOGist middle eastern adventurism  designed to stave off the inevitable collapse of the moneypowers schemes of world domination… should our ‘dear leaders’ here be allowed to allow it! Till next time, ZH'ers...

*at whose behest, one could ask… but who are we to address such questions to our blogging overlords?



falak pema's picture

Irrespective of how the US oligarchy plays its cards in this mangled mine field of its own creation, now being challenged by Russia as opposing force; lets face it hegemonial play ALWAYS invites like reaction in geopolitical knee jerk, and the Clinton years buried Russian ambitions a little too fast when they promoted Elstine as patsy replacement to USSR gone south.

Today, the youth of a turkish economic revival, now knowing a certain degree of affluence, as the ONLY viable outlet for Caspian sea riches pumped  to West for the OIL/gas flow, outside the unstable or uncontrolled areas of Irak/Iran and Russian satrapies, wants to see more personal liberites for all and not let Erdogan, very intelligent melon salesman, install a clever reversal back to obscurantist and neo-ottoman turkish empire; lording over the domains of devastated arab hinterland as surrogate of PAx Americana via Nato alliance. Erdogan is a nostalgic for populist totalitarianism of islamic bent alike the Wahhabists, friends of US hegemony as partners in local economic crime against the nations of this region. 

The young turkish people WANT a Mai 1968, a social revolution that does NOT upset the economic revival that regional geo politics has hoisted on Turkey in this oil rich and water rich region, the Anatolian heights of near asian continent. 

Mai 1968 is NOT Arab spring type revolution. The first wants social reforms w/o upsetting the economic apple cart. The second wants a much more radical change that is difficult to apprehend as its steeped in obscurantism and devoid of all economic considerations; both of which make it (arab spring) incompatible with Pax Americana  minimal conditions to ensure its geopolitical objectives around oil patch.

That is why Erdogan is expendable to the west if he mismanages this Turkish Mai 1968; 'cos it does NOT change the fundamental geopolitics of the region from the US perspective. He is replacable but not the role of Turkey as partner and oil outlet to the west.

This should be clear to all who discuss the current predicament that faces Turkey; totally different to that which faces the Arab lands of youth gone wild and prone to Allah ho Akbar cries; not so in more advanced and politically vibrant young turkey.

Admittedly Istanbul is not Anatolia, but the islamic sentiment in Anatolia is nothing like that manifested in Sunni arabia or Shia Iran amongst the most rabid elements of the population.  

Witness I make no reference to Zatonic mantra of I feel its irrelevant in the long term. A pimple on the face of Mid East destiny. Unlike Pax Americana...

JOYFUL's picture

Faced with a choice of responding either to the obvious provocations of the usual sockpuppet(s) below...

or Falak's somewhat more subtle approach to bearding the lion... I shall of course have to deal with this "Daniel" of the lineage of the  Meir ibn Gabbai\Moses de Cordovero cabbalistic provencal provenance... this zarathustra of the tzimtzum continuum...

you need not refer us to witnessing what you wish to see remain "irrelevant" - we are well aware of what you are tasked here to prevent being moved out of it's murkey Mirkwoodian shadows...

Pax Americana, on the other hand ... yur favorite code words for a historical reference rapidly dwindling in relevance... we can well witness to as your method of shifting the significant players in the ME shadow puppet production from your cabbalistic controllers to the dupe Merikan members of the neo-peon classes who are designed to take the blame... and the fall... for the sins of the sorcerors against humankind! Nice try, but no exploding cigar for you... not even a pressure cooker... you always manage to blow yurself up real good without any outside help!

eXHIBiT of which fatuous phenomena... today... is your requeim for the events of the storied glories of 68... Which the Euro-fascist of the current Brussels kind regards as a 2nd Girondist Miracle... an uprising against the state? Not likely...

a contrived and equally well planned putsch by the same usual suspect coalition of Frankist-Sabbatean\Jesuitical\Masonic Illuminists who diverted the colonists into a complete corruption of their own 'revolution' - at the hands of those same "Red Rudy" Deutchs Devils who now have usurped the levers of power on both sides of the pond to stuff themselves with the fruits of their "flavr-savr labors>>>??? ...most likely!

Yes history repeats... but not by the rhythms of comic opera buffa  which you peddle with your grinding organ of obfuscation... but rather to the tune of a pied-piper of pharaseeutical fraud and embezzelbubment which lures generation after generaton of dupe goy grazers to their doom.

Insulting the pride of all of the fruit-peddlin fellowship[and well you know my guildmembership-so the insult is direct and uderstood!] referring to the Safed-style Sultan of Ankara as a melon-salesman precludes any further correction of your specific misrepresentation of the current events here in Byzantium... we await your apology for that slander aganst smallscale tradesmen of the greengrocer kind!

as that is too worm-tongued even for you! By their 'fruits' ye shall know them! And indeed, Knight Errrant dude... how well we have come to know ye!

falak pema's picture

to think you can fork out this gobbeldy gooking at the turn of a knob, a push of a button, is awesome.

Water melons to you too! 

JOYFUL's picture

Any true habitue of the traditions of Parzival and the troubadour code would have recognized the need to pick up the thrown gauntlet post-haste... and heed the invitation to retreat in good order, to a neutral position...


instead, you choose to add fat to the fire! So be it....'of course you know.... this means war*!'

*I shall read your 'palm' for free today squire.... I see a trailer-load of rotten tomatoes entering your domain soon.... "Pomology"....war effected by means of mass messiness!

fxrxexexdxoxmx's picture

Only when the last Sunni or Shia is dead will there  peace in middle east. I am rooting for the good the Muslims to win.

The CIA and the west is to blame for which of the followers of the Prophet should be in chage right?


GoldForCash's picture

Yes Muslims in Chage

But Jesus Christ in charge...

bank guy in Brussels's picture

You are quite on target with your pointing to what seem to be the deeper geo-political earthquakes, in both of your above posts.

Asia Times Online is indeed a terrific source of journalism about the Middle East and Asia.

In the earlier post you cite the great Dr Jim Willie, who prefers his CB - Certified Bookkeeper title, to that of his PhD in statistics.

Willie in his great piece yesterday, pointing out how the Chinese are buying up resources and assets in Africa, for example, with US Treasury bonds ... and the Africans simply cash them in London so they can spend the money ... indeed the UST bonds 'going home to die'

Another great source re the Middle East turmoil at the moment - tho a strange site with some bizarre detours as well - is Veterans Today. Colossal reporting and fascinating speculation re Syria. One article there today, pointing out that about a million people have died from heroin problems since the US invaded Afghanistan in 2001 ... and revived the main source of global heroin production, which had been virtually extinguished under the previous Taliban rule.

Jim Willie's recent article, with the discussion of how Asians are buying much of the world and dumping UST bonds at the same time :

Typically interesting Veterans Today article, pointing out all the times that Osama bin Laden clearly denied he was involved in 11 September 2001, starting with the day right after the attacks ... and how the whole world is hoaxed and deceived about these very-credible denials:

JOYFUL's picture

Indeed BGIB... now that your continental cousin of the fanged persuasion has been dispatched back to his crypto-crypt(see below)... we can have a more civilized discussion of the auspicious co-incidence of the topics of China/TaksimSq\BigJim\VT here...

as all paths now lead east to a reopened Silk Road Civilization that will finally be free of the Banjamite Bablylonian talmudist predations which have plagued our peeples-east n west- for far too long.

As you may have missed my previous allusions to VT here before... I will simply restate that the talmudist takeover of what had been the premier organ of anti-zionist ressitance two years back provided an most interesting template with which to understand the backstage shadow-puppetry presentation currently occupying the formerly fabulous ZH///

according to which script... we can expect that several possible scenarios are playing out:

a)in a barn somewheres in Bulgaria, family members beloved to a certain Tyler are being held hostage by local Mossad operatives in a blackmail attempt to gain access to the controls here.

b)the now all-pervasive mind control technologies being used to disturb the brainwaves of all western denizens have been ramped up and focussed pon the editorial crew here... to turn them into unwitting minions of the usual suspects and create yet another disino site.

c)several brave Tylers have barricaded themselves in the cockpit and poured a lead\steel wall between them and the telavivian jihadists waving their boxcutters threateningly in the background... sworn to protecting and maintaining the ZH banner as the hangout of the authentic resistance.

As this thread appears to now be stale, I will reserve further comment pon your salient points to a fresher one, before my next sleep cycle.

We wish the latter all the best... via ZH Libre!

fxrxexexdxoxmx's picture

Sunnis and Shia's kill each other about Islam, right? They were killing each other about Islam before the the Founding Fathers had even been born.

But make sure you keep forgetting to mention that when we discuss the ME.

kchrisc's picture

"...indeed the UST bonds 'going home to die'"

Many would say "going home to kill."

Bastiat's picture

Fascinating, Bank guy.  I was arguing with people about the Chinese being "trapped" in US bonds 3 or 4 years ago, saying if I were them, I would do exactly what you describe:  make big resource deals and pay in T-paper.  It also will becom the mechanism for inflation as the cash paid out at redemption to those 3rd world countries will be spent, not recycled back into the T-Note freezer.  Velocity goes from zero to warp on those dollars and there is NOTHING Bennie can do about it.

GoldForCash's picture

Yes paper down shiney metals up,,,,

DaveyJones's picture

Exactly. God we're idiots

- "we're"

williambanzai7's picture

Let them buy all the vineyards and real estate they want. We've seen it before.

DaveyJones's picture

Pang's Pinot Palazzo  - I like it

JOYFUL's picture

The Chinese 'overseas investment' party is jus gettin started. And as I gathered from the other day here that there are still some amongst us who fail to grasp how the whole deal... as best described by "Big" Jim Willie repeatedly now... is gonna go down...

endless quantities of Treasury paper await repatriation to the source of their creation... it's not at all just super-rich Chinese buying themselves a second passport and ports in a storm... the state itself is a player of here-to-fore unimaginable size... ready to snap up opportunities all over the globe and being a virtuous cycle of using the power of those foreign reserves to get leverage on the profit-making potential of corporations that used to be guests in the Middle Kingdom... but which will soon nuff find themselves the bought-out lackeys of the Middle Kindgom in their own lands.

A cruel twist of fate... or the just desserts of two centuries of exploitation of the Far East by western powers whose sun has now set? At any rate... it's all over save for the low guttural whine[err...wines?] of the China perma-bears!

Buck Johnson's picture

I know, they are coming and coming fast and that money/treasury will swamp the markets.

kchrisc's picture

Exactly correct. The US/FedRes log ago lost control of monetary "policy" to the side of hyperinflation. i.e. they had ALREADY printed hyperinflation but it was "warehoused" overseas.

When, not if, foreigners lose "faith" in the dollar, they will come flooding back with little their "printers" can do about it. The Chinese are just getting a headstart.

Mark my words: The US gov will be the only government to ever put capital controls on funds flowing IN.

GoldenDonuts's picture

Well I guess that I will believe it when I see it.  About 30 years ago the west thought that Japan was going to buy everything.  They bought a lot of stuff and lost a whole bunch of money on it.  It looks very similar to me maybe on a larger scale now.   The slow down in the west will eventually slow China down.  It has to because who else will China sell to?   Will China find new market on Mars?  When the middle kingdom's economy slows down there will be problems and most of the money spent overseas will be coming back home.  Too bad they will either be bringing much less money back home or severly devalued money.

ebear's picture

"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."  J. Paul Getty

So.... who's the bank?

Uchtdorf's picture

Remember, friends, it's not all about money. It's about the power that money affords. Giving China a financial toe-hold in the US is the compromise we make for later having them send their troops here to quell "domestic disturbances" because our servicemen will soon tire of firing on their own...or at least I hope they will.

Think back to Tian An Men Square. They brought in troops from the outlying regions who would not be sympathetic to the demands of the protesters in Peking.

GoldenDonuts's picture

What exactly will stop the Americans from telling the chinese to go fuck themselves in the future.  China won't be invading the US anytime soon so worse comes to worse America says thank you very much for our money back and kicks them out.  But they won't have to because China is just a really big paper tiger.

john39's picture

they won't need chinese troops...  they have drones and soon will have mechanized AI terminators... on the way, wake up people.

kito's picture

africa is the last frontier before global collapse..........the race is on in africa to secure as many resources as addition to their natural resources, the global powers will do their best to suck the remainder of their wealth through debt slavery, as they did for many decades in south america.......