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Capital outflow from China creates competition in America

The Chinese are seeking a channel for capital into America to preserve and protect existing wealth. Several factors make the prospect of capital outflow from China to America extremely attractive. These factors include China’s free-falling currency, uncertainties in both the economic and political landscape, and a broader desire for temporary or permanent residency status in other countries.

This year, the yuan has plummeted to down 6% against the dollar. As the Chinese government deliberates rules and regulations to impede capital flight, an influx of Chinese investments into United States commercial real estate reflects an uncertain economic atmosphere and a sense of urgency to avoid the continuing trend of currency devaluation.

China’s currency holdings fell by $69 billion in November alone, marking the fifth straight month of decline. One Washington-based group of global financial institutions conservatively estimates net capital outflows of $530 billion from China in the first 10 months of the year.

The desire to move massive amounts of capital out of China and into America has been met by a strong domestic demand from entities in commercial real estate and alternative asset classes seeking funds. As competition for capital becomes increasingly more cutthroat, commercial real estate and private equity firms are becoming comparatively innovative and can follow a two-pronged approach.

The first is showing a record of accomplishment of moving foreign capital into the country. The second is more traditional and emphasizes added value and greater returns on investment. The EB-5 program provides a channel for moving capital into America and a diversified return of investment that can be both financial and offers the possibility of obtaining permanent residency in the United States.

NES Financial’s Intelligent EB-5 Solutions have been used on more than 450 projects, representing over $20 billion in EB-5 capital—more than any other solution on the market.

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2016-12-21T17:18:52+00:00 December 14th, 2016|Categories: EB-5, Fund Administration|Tags: , , , , |