In a stunning move, the Chinese government devalued its currency, the renminbi, by 1.9 percent against the dollar – the greatest single-day markdown since 1994. The move appears in part designed to curb capital outflows from China, which would give New York real estate, an industry that has benefited from these outflows like few others, something to think about.requires a gander at China’s macroeconomic environment: As China’s economy has slowed down over the past year, the People’s Bank of China, the country’s central bank, has repeatedly cut interest rates to boost lending and kick-start a struggling economy.
But cutting interest rates also decreases returns on investments such as Chinese domestic bonds, and Chinese investors looking for yield have increasingly looked abroad. In the first half of the year, China saw net capital outflows of $162 billion, according to government data cited by The Wall Street Journal.
This is where New York comes into play. The local real estate market has long been one of the most attractive destinations for Chinese citizens looking to invest abroad.“There haven’t been many times in my career where there’s been such a noticeable influx of capital from a particular group of investors,” Ronald Sernau, co-chair of the real estate practice at the law firm Proskauer Rose, told The Real Deal in February.