RMB vs USD

[skibum]

Well, if the RMB keeps getting stronger, the Chinese labor market will suffer as Wal-Mart searches for cheaper labor in other countries and the balance of payments will get better for the US against China but will just shift to another country. Another reason that China liked the RMB pegged to the dollar instead of floating.

[ameriken]

There's a reason the Chinese government is buying all that concrete and building supplies!

 

The trade deficit is a hot topic as well.

 

182564[/snapback]

My best friend is in construction/framing, and uses steel. He said the price of steel is going up and that steel is in short supply........

 

........he told me this when I first told him about meeting Jie in Shanghai. He said all the huge skyrise and office building projects here in Shanghai have actually put huge pressures on worldwide steel supplies........

Edited January 14, 2006 by ameriken (see edit history)

[chrisnhong]

You're not wrong about the price of steel. I've read stores of manhole covers being stolen and sold as scrap. Yet another hazard on China's roads.

[Tony_onrock]

RMB projected increase for 2006 3-5%. For individuals one can convert only 50K US per month, but the banking system is not able to track multiple accounts. Thus, if you set up a few accounts you can get the money in.

As far as those buildings... I am onto my third 100mm US. buy for a client. Another 500 mm U.S. fund is being raised. It is hot here. A lot of real estate funds are coming in in anticipation of the property market appreciation and currency appreciation. I am moving to Shanghai soon to get closer to the market.

[warpedbored]

The biggest increase in steel prices is due to China buying up all the available scrap steel on the market. Where I work the cost of power tools has gone up about 20% in the last year due to higher steel prices.

[Guest ShaQuaNew]

I found this chart rather telling, which illustrates the enchange rate from 2001 to the present day...

 

http://tinypic.com/kdtjec.gif

[jemmyell]

Hello,

 

Another vote for retiring in China, and I am currently trying to extend my e-business for downloadable deliverables so we can work from home in China too. That will be to pay for the tank of propane and the heater I have told my SO that I will want too...

 

We hope to keep the house in the USA, her current apartment and buy another house in the region where she grew up so she can be back with her family. I think owning property in China is a very smart move now as long as we can be sure of continuing ownership. I think that means my SO may not be able to apply for US citizenship, but this is another thing to research.

 

I am building an apartment as an addition above my garage. We can rent the rest of the house, and just keep separate access to my workshop and our apartment in the USA.

 

That's the plan this week anyways...

 

-James

[Guest ShaQuaNew]

We hope to keep the house in the USA, her current apartment and buy another house in the region where she grew up so she can be back with her family.  I think owning property in China is a very smart move now as long as we can be sure of continuing ownership.  I think that means my SO may not be able to apply for US citizenship, but this is another thing to research.

183491[/snapback]

Interesting thoughts James. My SO and I have pondered thoughts of keeping rather than selling her apartment in China. I know little about the investment value of property in China, but from what I'm hearing it's quite common for people to sell their homes and property at a loss. Any thoughts?

[jemmyell]

We hope to keep the house in the USA, her current apartment and buy another house in the region where she grew up so she can be back with her family.  I think owning property in China is a very smart move now as long as we can be sure of continuing ownership.  I think that means my SO may not be able to apply for US citizenship, but this is another thing to research.

183491[/snapback]

Interesting thoughts James. My SO and I have pondered thoughts of keeping rather than selling her apartment in China. I know little about the investment value of property in China, but from what I'm hearing it's quite common for people to sell their homes and property at a loss. Any thoughts?

183501[/snapback]

Hello,

 

Jesse, I think it all depends on whether you and your SO will have a reliable person in China to monitor the property and collect rents. Also, if your SO has family that you wish to visit there can be tax benefits from making 'inspection' visits to your holdings in China at least once a year. My SO has an old in friend in her current town, and of course her family where we plan to buy the other place. I think holding and renting is better than taking a loss in any case. I believe most losses in real estate dealings are caused by a short term need to sell in order to buy.

 

-James

[wpc76180]

RMB projected increase for 2006 3-5%.  For individuals one can convert only 50K US per month, but the banking system is not able to track multiple accounts.  Thus, if you set up a few accounts you can get the money in. 

As far as those buildings... I am onto my third 100mm US. buy for a client.  Another 500 mm U.S. fund is being raised.  It is hot here.  A lot of real estate funds are coming in in anticipation of the property market appreciation and currency appreciation.  I am moving to Shanghai soon to get closer to the market.

183058[/snapback]

Not every market is appreciating at the same rate.

 

The coastal cities like Guangzhou, Shanghai, and Shenzhen

are appreciating faster than the rest of the country.

This means a real estate bubble just like the USA.

 

Hong Kong property dropped like 30% during

SAR's and Asian currency crisis.

 

So my advice, if you're going to invest in China:

do your homework before you invest and have a

back-up plan.

[pkfops]

RMB projected increase for 2006 3-5%.  For individuals one can convert only 50K US per month, but the banking system is not able to track multiple accounts.  Thus, if you set up a few accounts you can get the money in. 

As far as those buildings... I am onto my third 100mm US. buy for a client.  Another 500 mm U.S. fund is being raised.  It is hot here.  A lot of real estate funds are coming in in anticipation of the property market appreciation and currency appreciation.  I am moving to Shanghai soon to get closer to the market.

183058[/snapback]

Not every market is appreciating at the same rate.

 

The coastal cities like Guangzhou, Shanghai, and Shenzhen

are appreciating faster than the rest of the country.

This means a real estate bubble just like the USA.

 

Hong Kong property dropped like 30% during

SAR's and Asian currency crisis.

 

So my advice, if you're going to invest in China:

do your homework before you invest and have a

back-up plan.

183515[/snapback]

Correct:

 

While touring Kali we spent about $2 on lunch for three

including beer.

[ameriken]

We hope to keep the house in the USA, her current apartment and buy another house in the region where she grew up so she can be back with her family.  I think owning property in China is a very smart move now as long as we can be sure of continuing ownership.  I think that means my SO may not be able to apply for US citizenship, but this is another thing to research.

183491[/snapback]

Interesting thoughts James. My SO and I have pondered thoughts of keeping rather than selling her apartment in China. I know little about the investment value of property in China, but from what I'm hearing it's quite common for people to sell their homes and property at a loss. Any thoughts?

183501[/snapback]

I believe the opposite is true in Shanghai, due to the large growth and development occuring there.

[Tony_onrock]

The 3-5% is the currency appreciation. Real property value is entirely another matter. Currently Shanghai market, top end, has gone down about 15% or so while mid to low range prices remained their value. It should hit the bottom in a month or two. There is not much activity in Shanghai in residential. Office and commercial is another matter, that is where I am buying for clients.

Situations in other cities differ. Like in Beijing it has been increasing slowly but steadily. Hangzhou the prices shot up. Shenzhen too, but may come down. Real property in Guangzhou shot up, same as in San Ya. Where it has shot up too much it is due for a correction.

For our clients we look at properties with IRR of 30% or so, something relatively hard to get anywhere else.

The current credit crunch due to gov. policy is dampening the supply side as developers ran out of money, which in turn builds the potential for long term appreciation. My pick is the area where hi tech companies are investing for long term appreciation for residential properties. It is a good time to buy if you know the market. I helped clients bought a total of $330 mm ( U.S.) in a little over a year.

[skibum]

Don't forget that when you buy RE in China, it will revert back to the govt in a set number of years- maybe 50 to 75 depending on the RE. This definately would affect depreciation as who would want a property that they would have to give up in a few years?

I can think of better places to invest in RE. Thailand for example. Some nice condos on the beach are (or were 4 years ago) quite reasonable. And the medical care is much better.

I think the one thing that would keep me from retiring in China is that Medicare would not care for me.

[ameriken]

If anyone is planning a trip to China, and want to check RMB vs USD, here is an easy helpful site for currency conversion to bookmark: http://www.xe.com/ucc/

 

Looked today and it was RMB/USD 8.0601/1