By Kevin Smith, San Gabriel Valley Tribune
POSTED: 03/20/15, 7:27 PM PDT
Rex Hong, first vice president with Cathay Bank and manager of the bank’s China business relationship.
It’s a fact that China’s investment in the U.S. has grown in recent years.
And Rex Hong, first vice president with Cathay Bank and manager of the bank’s China business relationship, offered some numbers Friday that show how powerful those investments have become.
Hong was the featured speaker at this week’s Speaker Luncheon Series sponsored by the San Gabriel Valley Economic Partnership. The event was held at Huy Fong Foods’ massive 650,000-square-foot processing facility in Irwindale.
“In 2013 China surpassed the U.S. as the world’s largest trading nation with a record trade volume of $4.2 trillion,” Hong said. “They are also the largest importer for the U.S.”
That equates to $440 billion a year, or 19 percent of the total imports, he said.
Since 2013 real estate has become the most important investment sector for Chinese investors targeting the U.S. The average per-property investment for a Chinese investor is $590,826, Hong said, compared with U.S. investors who spend an average of $247,417 per property.
Bill Ruh, government affairs director for the Citrus Valley Association of Realtors, attended Friday’s event and wasn’t exactly shocked to hear that.
“That’s really not all that surprising,” he said. “When you look at the dynamic of the Asian investor they tend to come into a market wanting higher priced properties and they tend to put more cash down. They are looking in areas like Arcadia and Diamond Bar.”
• PHOTOS: Touring Huy Fong Foods
By contrast, most first-time, American-born home buyers are seeking entry level properties at a completely different price point.
“First-time buyers will not be able to pay $500,000 to $600,000 for a home,” he said.
Ruh said China’s investment in Southern California — particularly in the San Gabriel Valley — is on the rise.
“Absolutely,” he said. “More and more investors are coming in. And when you look at local government the San Gabriel Valley is a fairly stable area. That’s what investors look for. We haven’t seen huge swings where 20 percent of the population are losing their jobs. And there is a security with real estate investment. California has always been a good place to invest.”
Hong noted that California is the nation’s top trading partner with China, followed by Texas, Illinois, New York and New Jersey.
“You may ask, ‘Who are the people who are conducting business here?’ ” he said. “It’s investors, immigrants, students … and visitors.”
Investors have significantly boosted their business with the U.S., according to Hong.
That jumped from $37 million in 2001 to $14 billion in 2014. The total investment during that period was more than $48 billion.
Hong said 1.8 million Chinese visitors contributed $21 billion to the U.S. economy in 2013, supporting more than 109,000 American jobs.
“California is also the top state for international students,” Hong said. “Chinese students contribute nearly $24 billion to the U.S. economy and 31 percent of foreign students are from China.”
A report issued last year by the Los Angeles Economic Development Corp. said that over the past 30-plus years trade (goods only) between the U.S. and China jumped from about $4.8 billion to $562 billion. U.S. exports to China likewise grew from $3.8 billion to $122 billion in 2013.
China was the Los Angeles Customs District’s top trading partner in 2013, followed by Japan, South Korea, Taiwan, Germany and Vietnam, the report said.
At the conclusion of Friday’s luncheon guests were given a tour of Huy Fong’s plant on Azusa Canyon Road.