Lost in the overblown debate about whether Chinese real estate
buyers are good or bad for Australia is something more interesting. It's the
true story of where Chinese buyers got all their money. If you are over the age
of 30, you grew up thinking of China as destitute. Encouraging me to eat my
veggies at dinner time, my mother used to say to me, "Children in China
are starving".
So how is it that China today has so much money that it can afford to invest in Australian real estate?
To answer that, we have to travel back to 1978. China's leader Deng Xiaoping kicked off economic reforms on a bigger scale than anything ever seen in any other country - at least until the Soviet Block collapsed.
Deng had very different priorities than the hard core communists who had gone before. He was a pragmatist who saw economic growth as a way to improve the lives of the Chinese people.
One of Deng's most famous lines is: "To be rich is glorious". That hardly sounds like Karl Marx.
The incredible wealth China has today began with the reforms that Deng kicked off. He made economic growth a national crusade and urged his countrymen to become 'socialist entrepreneurs'.
Many of the wealthy Chinese who invest in premium Australian homes got their start as entrepreneurs in this period. Remember, no matter how much money they have today, just about everyone in China over the age of 35 started off poor.
Here's a typical story. Liu Yongxing is a billionaire today, but was so poor as a young man that his parents had to send one of his brothers to live with another family. They couldn't afford to feed their own son.
As the economy opened up, Liu scraped enough money together to begin keeping quail and selling the eggs. Then he moved into animal feed. Today, Liu is a billionaire who owns 63 companies in the fields of aluminium, power production, agriculture, food, chemicals, natural resources, commercial banking, insurance, and real estate.
Zhang Xin is another beneficiary of Deng's reforms. Now a billioinaire, she turned 18 in 1978, the year the Chinese leader began opening the economy. As a teenager, she lived with her mother in a room the size of a closet. To save for an education abroad, Zhang worked for five years in small garment and electronics factories in Hong Kong. Once she had saved enough, she moved to London to study English at secretarial school. An amazing career followed, and today she has more money than all but a handful of people in the world.
So how is it that China today has so much money that it can afford to invest in Australian real estate?
To answer that, we have to travel back to 1978. China's leader Deng Xiaoping kicked off economic reforms on a bigger scale than anything ever seen in any other country - at least until the Soviet Block collapsed.
Deng had very different priorities than the hard core communists who had gone before. He was a pragmatist who saw economic growth as a way to improve the lives of the Chinese people.
One of Deng's most famous lines is: "To be rich is glorious". That hardly sounds like Karl Marx.
The incredible wealth China has today began with the reforms that Deng kicked off. He made economic growth a national crusade and urged his countrymen to become 'socialist entrepreneurs'.
Many of the wealthy Chinese who invest in premium Australian homes got their start as entrepreneurs in this period. Remember, no matter how much money they have today, just about everyone in China over the age of 35 started off poor.
Here's a typical story. Liu Yongxing is a billionaire today, but was so poor as a young man that his parents had to send one of his brothers to live with another family. They couldn't afford to feed their own son.
As the economy opened up, Liu scraped enough money together to begin keeping quail and selling the eggs. Then he moved into animal feed. Today, Liu is a billionaire who owns 63 companies in the fields of aluminium, power production, agriculture, food, chemicals, natural resources, commercial banking, insurance, and real estate.
Zhang Xin is another beneficiary of Deng's reforms. Now a billioinaire, she turned 18 in 1978, the year the Chinese leader began opening the economy. As a teenager, she lived with her mother in a room the size of a closet. To save for an education abroad, Zhang worked for five years in small garment and electronics factories in Hong Kong. Once she had saved enough, she moved to London to study English at secretarial school. An amazing career followed, and today she has more money than all but a handful of people in the world.
(Extracted from Australian Property Observer, July 2014)
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