Saturday, January 9, 2010

Chinese Investors Seek to Double Their Bets on Dubai 'Crisis'

Investors in Zhejian Province, a region in China known for the sharp business acumen, are eyeing Burj Dubai, the tallest building on earth, to double down their bets. According to Yomiuri Shinbun (in Japanese) on 1/10/2010:

"According to Zhejian Daily, a tour is planned during the Chinese New Year holidays (starting February 14) to shop for investment properties within the building.

"'Merchants of Wenzhou [city located in southern Zhejian]' are known as shrewd merchants in China from ancient times, and they are known for investing in high-priced assets as a group. They have reportedly lost a huge amount of money (2 billion yuan, or about $292 million) because of the Dubai crisis. [Other reports put the figure near $440 million, on top of $2 billion loss on their investment in coal mines in China.]

"However, as the average property value of Burj Dubai has dropped 50% from the level seen in the first half of 2008, the 'merchants of Wenzhou' are eager to double down on their bets that the bottom has been hit."

United Arab Emirates already has the Wenzhou Chamber of Commerce. There are currently 150,000 Chinese citizens living in Dubai, and 20,000 of them are merchants from Wenzhou. (For more, here is an English article from People's Daily.)

They may be doubling down on Burj Dubai, but at the same time they seem to be selling their investment properties in Beijing in a hurry. Rumor is that they are sensing the imminent burst of real estate bubble in China.


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