Forget the airy sentiments, such as in this 10/11/13 press release, where Zhang Yuliang, Chairman and President of Greenland Group, talked about being part of the Brooklyn brand and I Fei Chang, President and CEO of Greenland US, said Greenland wanted to be "building quality projects, undertaking social responsibility, and fostering economic growth in local communities."
|Gensler, via LA Times|
It's a huge, growing, grasping enterprise, looking aggressively inside and lately outside of China for new partners, new projects, and more predictable returns.
As noted by Crain's New York Business last November:
Greenland Holdings, for instance, has built several sprawling mixed-use real estate developments in China and is in the process of raising that country's second-tallest tower—a skyscraper in the city of Wuhan that will rise to a height of more than 2,000 feet.
And it's not just Brooklyn. Last December, China Daily reported that Greenland planned to invest $10 billion abroad in 2014, thus doubling its existing overseas investment.
On 2/14/14, in Chinese developer unveils plans for Metropolis project in L.A., the Los Angeles Times reported on Greenland's plans for a hotel and residential building, "the first phase of its $1-billion Metropolis Los Angeles project that is expected to redefine the downtown skyline."
“We have development funds, development expertise and experience and an enormous customer base,” and Forest City has the local execution capability," Zhang said in November, claiming an eight-year potential buildout.
Consider, as I wrote in December 2010 (in the context of EB-5 marketing), some lessons from James McGregor's 2005 book One Billion Customers: Lessons from the Front Lines of Doing Business in China:
- "The sad fact is that the Chinese system today is almost incompatible with honesty."
- "As a result, the Chinese can feel pretty good about doing almost anything as long as they don't get caught."
- "China is not the legalistic society that typifies the West. If the Chinese want to do something, they find a way to skirt rules or laws."
- "A country that was until recently poor but safe has become one that is unsettled and insecure. There is nothing to believe in but making money."
In Brooklyn, the apartments--at least the initial rental units--will be occupied by locals and Atlantic Yards investment, stunningly, will be used to leverage low-interest loans from foreign millionaires (many of them Chinese) seeking green cards.
But new construction in London by Greenland is expected to be purchased by Chinese nationals. (And that might apply to later condo units built in Brooklyn, though presumably there will be high local demand too.)
Chris Blackhurst, a columnist for London's Independent, wondered if that was a dangerous policy:
Colliers International, the property consultancy, reckon that mainland Chinese account for 20 to 40 per cent of all foreign investors in London, Toronto, Vancouver and Singapore.Chinese political culture
On average, says Global Financial Integrity, 52.4 per cent of investments that flowed into tax havens involved capital acquired illegally via bribery and kickbacks. But the non-payment of taxes and the breaking of controls on the transfer of money overseas means that all the wealth is illicit.
We should not kid ourselves. Foreign cash is pouring into the UK, especially London. But are these all people we would like to do business with?
In a top-down system that favors political will and connections over regulatory oversight and public debate, large-scale projects in China can be designed, built and put to use in the space of just a few years.Here's how it works:
“The top-down system can make things very simple,” [American architect Daniel] Gillen says. “The leader says, ‘I want it; you make it,’ and it’s done.”
...But in China, the primary concerns are prestige and development for its own sake, and the leaders would move heaven — and lots of earth — to get the museum built. “These projects are the Louis Vuitton bags of architecture,” says one foreign architect, who has worked on several marquee buildings in China. “Every city in China wants one now.”
“In terms of pure production, the local staff could work faster and more efficiently than anything I’ve ever seen in the U.S.,” [American architect Adam] Mayer says, even if in some instances they saw no shame in “literally copying designs right out of a book.”And a desire for acclaim:
Still, the mantra was always “Bigger, bolder, flashier.” During one meeting at the urban-planning bureau, Mayer recalls an official who implored them, “Make us a landmark that will stand out and make people notice!”Yet there are reasons for doubt:
But many foreign architects in China sense that they are operating in the dark, toiling in a system they dimly understand. Real estate development in China is a murky business. There is little transparency — and lots of horse trading — in everything from the acquisition of land to the awarding of bids and competitions. In all but the highest-profile projects, foreigners are largely sidelined during the building process itself, which by law and tradition is controlled by local design institutes.What's next?
As foreign architects continue to arrive, there is also increasing competition for jobs and business... Chinese and foreign firms alike are moving to localize their staffs — both to cut costs and to cultivate a new generation of Chinese architects, many of whom have trained abroad.