An excerpt from the Sydney Morning Herald, Thursday 25th January 2018

There’s never been an immigrant class quite like it. And while they’re relatively few in number, the wealthy Chinese who now call Australia home are driving the boom in demand for everything from Toorak mansions with tennis courts to luxury handbags, jewellery and yachts.

In the 1981 Australian census, fewer than 26,000 people gave China as their place of birth. The number of Chinese-born Australian residents rose slowly over the next 20 years, then started to shoot up. By 2006, it had reached 206,000, and over the following 10 years the figure increased to 510,000.

“This is probably the first time in Australia’s history that we’ve had a huge influx of wealthy immigrants,” says Vogue’s Edwina McCann.

Now that the People’s Republic of China is producing dozens of new billionaires each year, it’s easy to forget it is also an authoritarian Communist state. The government in Beijing has presided over the greatest explosion of wealth in history and created a highly aspirational society. The desire to move wealth to safe havens is a key driver of the Chinese diaspora.

The Hurun Research Institute in Shanghai reported last year that about half of China’s “high net worth individuals” – defined as those with assets of between 10 and 200 million RMB ($2 million to $40 million) – were considering establishing footholds overseas.

Apart from wanting to get their money offshore, those in the Hurun survey sought a better living environment, with clean air and good-quality fresh food. They also wanted first-class schooling for their children.

In Australia, which followed the United States, Canada and the UK on a list of the Hurun survey group’s favoured destinations, affluent foreigners can effectively buy residency. Under our Significant Investor Visa (SIV) scheme, for instance, a person who puts $5 million into approved Australian investments becomes eligible to apply for a permanent visa four years later. Almost 90 per cent of people granted SIVs since 2012 are Chinese.

“They bring their money and their know-how, they create jobs and they pay a lot of tax,” says real estate agent Monika Tu, who specialises in marketing multimillion-dollar properties to Chinese immigrants.

f you are, for example, Chinese stock trader Andy Wenlei Song, why not splash out $60 million for a house overlooking Sydney Harbour – even if you have to pay a $600,000 fee to Australia’s Foreign Investment Review Board just to apply to buy it? “After you’ve bought the exotic cars and the high fashion and jewellery and artwork, what’s next?” asks author Kevin Kwan. “It’s to have that trophy property in Point Piper.”

Blue-chip real estate is not only a good long-term investment: it announces to the world that you have arrived. “There is a striving for prestige and social status at all times. The whole concept of face is very important.”

In China, the children of the very wealthy are known as fuerdai,which literally means “rich second generation” but has come to be associated with reckless spending and flaunting of privilege.

Almost 180,000 Chinese were in Australia on student visas last financial year, contributing close to $9 billion of the $28.6 billion the nation earned from international students. While most are not fuerdai, they do come from affluent families who can afford the hefty tuition fees charged to foreigners.

And thanks to China’s one-child policy, which continued until 2015, many are only children of only children, funded not only by their parents but by both sets of grandparents. “So they’ve got big allowances,” says Naomi Parry, managing director of a luxury brands public relations firm, Black Communications. “They can have $40,000 or $50,000 a month.”

Investors from China are by far the largest source of overseas funds coming into Australia. The latest figures available show that the Foreign Investment Review Board approved more than $47 billion in Chinese investment in the financial year to June 2016. That included $32 billion spent on real estate – four times more than was spent by investors from the US, our second biggest source of foreign funds.

Australian law allows foreigners to buy newly built dwellings or vacant land but restricts their purchase of existing homes or apartments.

According to a recent report on housing affordability by Industry Super Australia, an umbrella organisation for industry superannuation funds, some foreign investors are circumventing the law by deputing young family members studying in Australia to buy property. Students have temporary visas, which entitle them to purchase new properties and one existing home each, provided they live in the established dwellings and sell them within three months of leaving the country.

“You have these teenagers living by themselves in big, rambling, expensive houses and apartments all over town in Sydney, Melbourne and Brisbane,” says Kevin Kwan, whose Crazy Rich Asians has been made into a film, due for release later this year.

Property developer Xu Jiayin, whose $55.4 billion fortune put him at top spot on Forbes’ China rich-list last year, was ordered to offload his $39 million house at Point Piper in Sydney in 2015 after the purchase was found to be illegal. But such forced sales are rare, and it seems to Morrell that Chinese buyers aren’t seriously bothered by the Australian regulations: “They’re getting around them quicker than we’re making them.”

The Chinese government has recently tightened controls on the movement of capital out of the country. “There is no question it is a lot harder to get your money out,” says Geoff Raby, a former Australian ambassador to China who now heads a Beijing-based business advisory firm. “But a lot of the money you see was already offshore. Many of these people legitimately have businesses in Hong Kong and can move money from Hong Kong to Australia.”

China is a hugely hierarchical society,” he says. “The most prestige, power and influence are still with the bureaucratic, political elite, not with the wealthy businesspeople.”

“Part of the appeal of Australia and America was that they imagined them to be places where talent and ability were rewarded, and connections were less important. They had a sort of idealised view of these societies.”