Cash rich Chinese are looking eagerly at real estate in the US - now on the market at a discount - as well as other assets such as gold and diamonds from overseas. Chinese companies are buying up high-yield bonds from distressed US companies. From the article:

“Some Chinese are so eager to turn their yuan into other assets that when an online real estate brokerage organized a tour of foreclosure auctions in the United States, it received so many applications that it had to turn away nearly 400 people.

In Shanghai, cash-rich Chinese companies are buying high-yield bonds issued by distressed American companies at a time when many Western investors are steering clear of bonds even from solid companies.”

This trend is likely to have a noticeable affect not just on the Chinese economy but also the US economy.

“Though there are myriad reasons to move capital around, there is also cause for concern: Chinese authorities announced Monday that 20 million migrant workers had lost their jobs. If they do not find new work, these workers could form a volatile class of unemployed.

Even more crucial, Chinese individuals and companies placing more of their money outside China could affect one of the constants of international finance over the last five years: China’s central role in bankrolling American trade and budget deficits.”

This shift adds its own element to the flattening of the world, which, whether good or bad, certainly seems like an inevitability. It will be interesting to see how this trend continues to unfold.

Read the original New York Times article.