New York's iconic Waldorf Astoria was purchased
by a Chinese company in 2014 for nearly $2 billion. After the acquisition, President Obama
stopped staying here due to security concerns, breaking with the decades-long tradition of U.S.
presidents staying here during their trips to New York. The move was highly symbolic of
Chinese money flowing into the U.S. Billions of dollars flow into the U.S. from
China in the form of investments every year. And in some parts of New
York City, it’s widespread. Chinese investments include 28 Liberty Street, Baccarat
Hotel and a stake in the General Motors building. Bank of China agreed to pay nearly $600 million
to buy this midtown skyscraper in 2014. A big name gaining attention for her
investments is real estate mogul Zhang Xin. She’s a Chinese billionaire whose
family acquired a 49 percent stake in this building, Park
Avenue Plaza back in 2011. And she came together with investors to buy
40 percent of General Motors building in 2013. And then there’s a
company called HNA Group. It poured billions of dollars into properties in New York,
Chicago, San Francisco, Minneapolis and more. But it’s not just
real estate. In 2012, Chinese conglomerate,
Dalian Wanda Group acquired AMC. The $2.6 billion dollar deal would make
it the world's largest cinema chain. Chinese investors also bought a $3.5
billion stake in Legendary Entertainment, the company behind Matt
Damon’s “Great Wall” movie. In 2016, Chinese investment
into the U.S. hit a high. The next year though it declined
significantly, reversing the trend. Just take a look at the China Investment Monitor which
tracks Chinese direct investment into the United States. The figures have generally been on an upward
trend since the tracker was launched in 2000, peaking at nearly
$46 billion in 2016. Then investments
dropped off. So why the sudden decline? Well to understand that, we have
to go to back to the original surge. You see, Chinese people and
businesses were growing wealthier, but they were worried about
China’s explosive growth slowing. After all, their holdings
are priced in the yuan, and a drop in the yuan against other currencies
would mean the value of their assets goes down. So mainland companies started buying
up assets in other countries like the U.S. It was their way of diversifying their portfolios,
hedging their bets against a downturn at home. But all of that money moving
from Chinese bank accounts into foreign real estate and
companies made Beijing anxious. The government was worried all of that capital
abroad would do what Chinese businesses were concerned about in the first place - drain value from
the domestic economy and depress the local currency. So, through various means, the Chinese government
clamped down on money leaving the country, that's what’s called capital controls, and encouraged their
firms to bring back some of the money they sent away. Beijing was particularly focused on China’s
four biggest private conglomerates: Earlier, I mentioned the purchase of
the Waldorf Astoria in New York. That was made by Anbang, which
had spent tens of billions of dollars around the world buying
up high-profile properties. But in early 2018, China’s government seized
the company and even detained its chairman. That means China’s government sort
of owns the iconic New York staple. Then there’s the Hainan Airlines, or HNA Group.
The company began as a tiny airline in 1993. But today it’s a global conglomerate, owning
real estate, hotels and tourism companies. In 2017, it was named the 170th biggest company in
the world with annual revenue of more than $50 billion. As part of its investment spree,
HNA bought Radisson Hotels Group, a $6.5 billion stake in Hilton hotels
and a stake in Deutsche Bank. This building, 245 Park Avenue was purchased by
China’s HNA Group for $2.2 billion dollars in 2017, making it one of the priciest office
building purchases in New York history. But a year later, HNA Group was
said to be looking for a buyer. Proof that China’s effort to reign
in these companies is working. Just look at these assets in the U.S. either for sale
or being sold by some of China’s biggest companies. Meanwhile, the U.S. is making it more
difficult for foreign buyers to invest, adding more roadblocks and in some
cases even citing national security concerns. The U.S. blocked a deal by Alibaba-backed
Ant Financial to try and buy MoneyGram. Meanwhile, HNA Group dropped its bid to
acquire hedge fund SkyBridge Capital. Chinese investment in the U.S. has leveled out to
where it was before it surged earlier this decade. But whether it will fall further or make
a comeback remains to be seen. Hey guys, it’s Uptin,
thanks for watching! For more of our videos, check out "What is China buying
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