“The Chinese will save Detroit.”
“Toledo is booming, thanks to Chinese investors.”
“Half of LA/Orange County/fill in the SoCal City will be Chinese within ten years.”
I have heard all the above recently and I don’t buy a word of it. I thought about these comments today when reading a Slate Magazine article, entitled, “How China Could Save Detroit.”
Here’s the deal.
1. China isn’t going to save Detroit. Detroit is (as of 2010) about one percent Asian. That’s 7,500 Asians and I doubt that even half of this number is Chinese. This is down 2,000 (more than 20 percent) since 2000. Where are the Chinese who are going to save Detroit? Why would the Chinese want to save Detroit by buying houses and living there when there are so few already there — yes, I am assuming that most Chinese would prefer to live in US cities where there are already other Chinese. Detroit used to have nearly 2 million people. It is now down to about 700,000. What would “saving” it even look like?
2. Toledo isn’t exactly booming. Its unemployment rate is nearly 9.0%, which is higher than Ohio as a whole, which in turn, is higher than the United States.
3. Yes, I understand that some very wealthy Chinese have purchased homes in Southern California, but what evidence is there that this is going to continue, much less accelerate?
4. The Slate Article mentioned how “Chinese Interest in the EB-5 immigrant investor program has grown threefold since 2008, with the Chinese now making up 80 percent of applicants. But all that means is around 2,500 Chinese Eb-5 investors a year. Even if Detroit were to receive 10 percent of them (and why would it), that’s only 250 people. And if were to sell one shirt to 10 percent of the people in China….
And here’s the kicker. I am “just not seeing it,” with the “it” being some massive influx of Chinese investment into the United States, such that it becomes a game-changer. And when I talk to my friends and colleagues who should be seeing it, they aren’t either. Now I am sure that there are some realtors in places like Orange County that are doing a bang up business helping Chinese buy homes, and I also know that there are tens of thousands (maybe even hundreds of thousands) of people in the United States employed in Chinese owned factories, but I just do not see Chinese citizens coming here in large enough numbers to significantly tip any mainline economic numbers. Yes, Chinese investment in the United States is important and growing, but let’s keep it in perspective.
According to the Rhodium Group, Chinese greenfield investment in 2013 in the United States totaled about $14 billion. That’s about USD $44 per capita. Forty-four dollars. And I have to think that at least some of that $44 per person would have entered the United States from some other country had China not been the one doing the buying.
Chinese investment in the United States may help at the edges, but it isn’t going to save Toledo or Detroit, much less have a major impact on the country as a whole. I am from Michigan (about halfway between Detroit and Toledo) and I can remeber the “Japanese are coming racism” from an earlier era and I worry that there is a bit of that with “the Chinese are coming” trope.
What do you think? Is Chinese investment going to change America, and if so where and how? Am I missing something here?