Reporter Journal / William Hennelly

Affluent Chinese-American investors well informed, diligent, survey finds

By William Hennelly (China Daily USA) Updated: 2015-10-08 05:38

The wealthy Chinese-American investor is not only savvy but also reliant on traditional Chinese virtues such as patience and passing wisdom down through generations.

"The Chinese are very well developed and almost an ancient culture," said Noor Menai, CEO of CTBC Bank USA, which released a survey Tuesday on affluent Chinese-American investors. Menai was in New York that day to speak at Bloomberg Markets' Most Influential Conference.

Affluent Chinese-American investors well informed, diligent, survey finds

"One of the things that follows you from generation to generation is that success begets success," he told China Daily. "If you want to become successful, take advice from people who have already become successful.

"The people giving advice in Chinese culture also feel the burden of giving advice," Menai said. "So it’s not a hot tip that they are imparting to you.

"When they say, 'Go into plastics, young man,' they've researched the topic and they really mean it," he said.

The survey by the bank, which is based in Taiwan with US headquarters in Los Angeles and branches in New York and New Jersey, found that Chinese also are bullish on the US, more so than non-Chinese Americans, with almost two-thirds finding the US a good place to invest after the 2008 recession, compared with 43 percent of the general population.

What are some characteristics of the successful Chinese-American investor?

"They tend to be much better educated … much better informed … they watch media, they read, they talk to people," Menai said. "Therefore, they're more sanguine about the fundamentals of where a particular investment is going, whereas we (other Americans) tend to be more trend-driven and listen more to, you know, (CNBC's Jim) Cramer on television smashing furniture and cutlery.

"They’re very serious about their money," he said. "They're very serious about becoming prosperous. They're very serious about their nest eggs. They only listen or get their advice from serious sources."

Although they do read analyst research, "you don't have to have a research arm", Menai said. "You can get research from commercial sources. … It's part of the mosaic of the information sources that they use."

Innovation has become a buzzword in Chinese business circles lately. In the survey, 40 percent said they would be more likely to invest in a company that develops innovative products compared with 30 percent nationally.

Some 72 percent see innovation as the strength of the US economy, versus 56 percent of the national sample; 38 percent see predictability as an area of strength, compared with 24 percent nationally.

"You might think predictability and innovation don't mesh, but in fact for Chinese Americans, they are intimately intertwined," said Clayton Dube, director of the US-China Institute at USC. "To be a reliable economic performer in the future, you must have some mechanism by which you systematically produce innovative products and services."

Some 25 percent tabbed "generally saving for the future" as their primary goal when investing, versus 15 percent nationally. That number was 54 percent for first-generation Chinese immigrants compared with 39 percent of Chinese Americans whose parents or grandparents immigrated.

On whether they try to recoup investment losses immediately, 45 percent said they do not, versus 32 percent nationally.

And 32 percent said retiring comfortably was the top sign of financial success, compared with 23 percent of others.

"A strong desire to retire early may be attributed to the sense of security that Chinese Americans are trying to achieve," said Cindy Fan, vice-provost for International Studies and Global Engagement at UCLA. "All immigrants in a host society probably do not feel as safe in terms of their long-term financial stability compared with the native-born."

The survey's respondents were 130 immigrants and first-generation Chinese-Americans and a national sample of 130 non-Chinese Americans. Survey-takers were required to have investable assets of at least $250,000 to qualify.

Menai graciously offered opinions on other financial topics.

On the wisdom of Anbang Insurance Group Co's purchase of the Waldorf Astoria New York hotel in October 2014 for $1.95 billion, Menai predicted expansion: "There will be an over-the-top, ridiculously opulent but in-demand Waldorf Astoria in every major destination in the world. … The Chinese don't do vanity purchases."

On the Chinese economy decelerating: "That's like saying a bullet train traveling at 300 mph is now traveling at 250 mph. Yes, it's a slowdown, but it's still going very fast. We don’t see any near-term letup in the success of that region."

One topic at the Bloomberg conference was world financial capitals.

"They asked me to talk about which one of the financial capitals will be most influential in 2025 — New York, London or Hong Kong," said Menai, who believes it will be Hong Kong. "About $78 trillion of infrastructure projects are going to be financed in Asia out of Hong Kong. And Hong Kong is five hours away from 50 percent of the world's population."

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