Sorry, just kidding, don’t panic. But did you ever notice how whenever a new ethnic group around the world achieves economic success and begins foreign direct investment in real estate and other assets, that the locals are usually spooked? In the 70s it was the Arabs, newly awash in oil money. In the 80s it was the scary Japanese buying Rockefeller Center and such – terrifying! And today, it’s the Chinese – who have already financed a couple of America’s wars of adventure, of course – but who are now perhaps financing real estate projects in the San Francisco Bay Area:
Lennar Corp., LEN +0.80% one of the U.S.’s largest home builders, is in talks with the China Development Bank for approximately $1.7 billion in capital to jump-start two long-delayed San Francisco projects that would transform two former naval bases into large-scale housing developments, according to people familiar with the discussions.
The negotiations aren’t final and the financing arrangement could still fall through. But if completed, the deal would reflect a changing dynamic between the U.S. and Chinese economies, as an American company turns to China for help funding a long-delayed and partially publicly funded project that otherwise wouldn’t get done.
Remember that Canada remains the greatest investor in the United States by a wide margin, and Deutsche Bank has been up to their ears in U.S. real estate. It’s just that we don’t notice them, likely because they have been part of the international system for some time and not, you know, communists.
I’m not sure for whom this is a bigger deal – China or America.