How China’s overseas property dream turned into a nightmare
Capital controls mean people who signed up for flats in Malaysia cannot send money from mainland
Middle-class mainlander Laura Zhang found the idea of owning a home overseas irresistible after being bombarded by commercials for an affordable project “near Singapore”.
The Forest City project in the southern Malaysian state of Johor, the subject of the advertisement , is being developed by Country Garden, China’s third-largest home builder.
Zhang said she was told a flat in Forest City, the developer’s flagship project Malaysia, was not only an asset that would appreciate in value but also one that offered a tropical, garden city lifestyle, access to high quality international education for her son, and a chance for the whole family to become permanent residents of another country.
However, capital controls introduced by Beijing have turned the dream of a Malaysian property into a nightmare for many mainlanders.
Zhang, who lives in Hefei, the capital of Anhui province, was enticed by Forest City commercials in early 2016, when China was witnessing the largest wave of outbound investment the country had ever seen, with its foreign exchange reserves, a rough gauge of capital outflows, falling at a record pace.
Big Chinese investment deals abroad made frequent headlines, with property deals being particularly eye-catching. Dalian Wanda chairman Wang Jianlin, China’s richest man, bought a 10-bedroom home in Kensington Palace Gardens in London at the end of 2015 for £80 million (US$118 million at the time), and Anbang, a Chinese insurer controlled by tycoon Wu Xiaohui, completed the US$1.95 billion purchase of the Waldorf Astoria New York hotel, a Manhattan landmark, the same year.
