There’s never been an immigrant class quite like it. And while they’re relatively few in number, the stonkingly rich Chinese who now call Australia home are driving the boom in demand for everything from Toorak mansions with tennis courts to luxury handbags, jewellery, yachts and plastic surgery.
It’s Friday night at Chadstone shopping centre in south-east Melbourne, and a queue has formed outside the Chanel boutique. A sign at the store’s entrance says it’s full: “Due to safety reasons, we are unable to let any more clients in at this time.” A dark-suited staff member stands near the sign, as if to deter anyone so desperate to spend $7000 on a handbag that they are thinking of forcing their way inside.
Chadstone is Australia’s largest shopping mall, with more international designer-label boutiques than anywhere else in the country. Dior, Balenciaga, Saint Laurent, Prada, Armani, Burberry, Givenchy, Valentino, Fendi – they’re all here, under the soaring roof of the centre’s high-fashion precinct. And Chanel isn’t the only one making prospective customers wait for admission. As I join the throng on an indoor boulevard, I see lines snaking out the doors of Dolce & Gabbana, Gucci and Louis Vuitton. In the air, there is barely contained retail mania. And the sound of people speaking Mandarin.
Just 2.2 per cent of the Australian population was born in China, yetVogue Australia editor-in-chief Edwina McCann gives the group a good part of the credit for a boom in demand for luxury goods. From Hermès scarves and Cartier watches to top-of-the-range BMWs, products with pedigree – and preposterously high price tags – have never been more popular in this country. “It is quite an interesting phenomenon,” says McCann, who publishes a twice-yearly Mandarin edition of her magazine for the Chinese expatriate community. (She’s not the only one. The production of Chinese-language versions of glossy Australian magazines is one of the few growth areas in the beleaguered publishing industry.) 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.
McCann points out that among those who have arrived from China in the past decade are many who differ in one significant respect from most earlier settlers from around the globe: they are flush with funds. “This is probably the first time in Australia’s history that we’ve had a huge influx of wealthy immigrants,” she says.
The impact goes beyond boosting sales of fabulous frocks and fancy cars. Over the past few years, Chinese newcomers have injected billions into the economy, spending with particular enthusiasm on real estate and their children’s education but also supporting a range of niche industries. Mark Ashton, president of the Australian Society of Plastic Surgeons, reports that he and his colleagues devote an increasing amount of their time to procedures that make Asian faces look more Western. “And the wealthy Chinese are absolutely driving it,” Ashton says.
Idy Chan, manager of Woolwich Marina in Sydney, says she has a waiting list of Chinese émigrés wanting berths for their smart yachts. Prosperous Chinese immigrants are providing jobs for housekeepers, nannies, drivers and interpreters, says Sydney real estate agent Lulu Pallier. “The very wealthy have an army of people around them.”
It seems to Pallier, herself originally from Shanghai, that “this is all very positive for Australia. They bring good ideas and lots of money.” She is aware, though, that rich Chinese have a tendency to keep their heads down – even if it means passing up the opportunity to purchase a waterfront mansion. “I’ve had people say, ‘This is a very beautiful house but I will be in the headlines. People will think I’m showing off, buying the most expensive house.’ They have lately had that kind of concern in their minds.”
The wariness is partly a reaction to recent allegations that expatriates have acted as agents for the Chinese government, making large donations to Australian political parties in order to influence policy-making. But wealthy Chinese have long been reluctant to draw attention to themselves. “They don’t really like publicity,” says Gold Coast property agent Tony Yan, who in 2016 sold a vacant riverfront block at Paradise Waters to Chinese railway tycoon Wen Bingrong for a local record price of $9.2 million.
Designer Jared Poole, who has drawn up plans for the site – a French-style chateau with slate roof and zinc domes, plus a four-bedroom guest house and European-style gardens – confirms that his client prefers to stay out of the media. “I think there’s some sensitivity about mentioning Mr Wen’s business dealings,” Poole says.
Sydney interior designer Robynne de Courtenay tells me she too is familiar with the reserve of wealthy Chinese. “They’re very, very private,” de Courtenay says. “Like extremely private.”
None of which comes as a surprise to Barry Li, author of The New Chinese: How They Are Shaping Australia. Li, who migrated to Sydney with his wife Zhen in 2011, recalls a Chinese adage: People fear getting famous like pigs fear fattening up. “Being a rich guy in China, and high-profile, you run a lot of risks,” he says.
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. Yet most of China’s 1.38 billion citizens remain poor by Western standards, and the old idea that property owners are enemies of the people remains not too far below the surface. Business magazine Forbes acknowledged the preference of wealthy Chinese for anonymity by illustrating its 2002 list of the nation’s richest people with an image of men and women wearing paper bags over their heads.
This is probably the first time in Australia’s history that we’ve had a huge influx of wealthy immigrants.
Suspicion in China of entrepreneurial types has lessened in the past few years, says cultural anthropologist John Osburg, though ambivalence towards them remains. A slang Chinese term for the newly wealthy, tuhao, loosely translates to “cashed-up bogans”. “It is not entirely derogatory,” Osburg says. “It’s often used with a sense of humour.”
In his book Anxious Wealth: Money and Morality Among China’s New Rich, Osburg noted that a key to business success in China was cultivating allies within the state bureaucracy. But since the book was published in 2013, a campaign against official corruption has given networking, guanxi, a dangerous edge. “It’s sometimes the case that when a government official is brought down, he will take several businesspeople with him,” Osburg says. “In the city of Chengdu, where I did my research, several prominent businesspeople have been imprisoned or had their assets confiscated – or, in one instance, been executed – as a result of the anti-corruption campaign.” The seeming randomness of the swoops by investigators makes everyone feel vulnerable: “There have been many instances of apparently completely legitimate businesspeople having their assets seized.”
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.
Osburg says many Chinese regard their own education system as too rigid and competitive: more likely to produce obedient test-takers than individuals with creativity and initiative. “That’s particularly common among businesspeople, who have a sense that if you’re going to succeed in the business world, you need to cultivate other skills besides memorisation,” he says.
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.
I meet Tu one morning at a house in the Sydney suburb of Rose Bay she aims to sell for $8.8 million. Wearing a red Valentino dress, Chanel necklace and Hermès bangle, she alights from a black BMW and leads the way inside. We get into a lift, where she glances at my non-designer jacket. “Looks like Gucci,” she says kindly.
In a living area with a panoramic harbour view, Tu explains that her services extend to helping house-hunters overcome cultural differences and understand how things work here. “Our job is to become their trusted advisers,” she says. “As an Australian-Chinese, it’s my responsibility – my mission – to actually guide my people from China and merge them into our Australian lifestyle.”
When Tu started her Black Diamondz agency in 2009, she was dismayed by the behaviour of some of the self-made Chinese magnates she encountered. “They spit and they shout and they smoke in people’s houses,” she says. Not that she held it against them. The speed of China’s transformation from one of the poorest countries in the world to an economic superpower meant that many who had made fortunes hadn’t had time to acquire polish. “You’ve basically gone from a peasant to a king,” she says. “And the problem is, if you are that rich, nobody really tells you what is right or what is wrong.”
Tu’s attempts to pull clients into line were not always welcomed: “Some people don’t like me at all. They shout at me. But with time, they get it. I’m here to help them.”
For the first five years, almost all her Chinese clients were in construction and property development. The more recent arrivals come from a range of backgrounds – manufacturing, food processing, technology, e-commerce and so on. They are more worldly than their predecessors, she says, but she continues to offer advice on local mores: “It doesn’t matter whether they’re peasants, developers, factory owners, they deserve to be told what is the right thing to do.”
Sitting in on this conversation is Courtney Wong, a young real estate agent in the Black Diamondz stable. The son of Hong Kong-born Sydney businessman and philanthropist Albert Wong, he says working for Tu has been an eye-opener. “I’ve seen the wealthy Chinese she deals with on a day-to-day basis, and it’s really extraordinary. The amount of money, which I could never have imagined …” Courtney agrees that he comes from a rich family. “But this is different rich,” he says. “It’s crazy.”
Crazy Rich Asians seemed to Kevin Kwan the obvious title for the first volume in his trilogy of comic novels set in what he sees as a new gilded age. “The amount of wealth that has been created is mind-boggling,” says Kwan, who was born in Singapore, lives in New York and regularly visits family in Australia.
In his books, old-money Singapore and Hong Kong families look down their noses at big-spending mainland Chinese, dismissing them as hopelessly brash parvenus. But as Kwan points out, the Vanderbilts were considered vulgarians when they founded their fortune in the 19th century. Now they’re US aristocracy. Kwan himself doesn’t blame the mainlanders for the exuberance with which they fling their money around. “In the past, it took a generation – or several – to make a billion dollars,” he says. “Now, for the mainland Chinese, it takes a few years. When you’ve made that much money so quickly, it’s much easier to spend it in larger quantities.”
If 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 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 Rich Girlfriend, Kwan’s second novel, a stonkingly rich mainland-Chinese couple move to Hong Kong and set about climbing the social ladder. To assist them, they hire a well-connected local, Corinna Ko-Tung, who is dismayed when they turn up to meet her dressed from head to toe in Prada. “To these new arrivals from Guangdong, it was the height of sophistication,” Kwan wrote, “but to Corinna, it just screamed clueless Mainland money.” She takes the pair in hand, doing “everything from refining the art on their walls to the clothes on their back – all in service of getting them memberships at the most elite clubs, their names onto the right invitation lists, and their children into the city’s top schools”.
Kwan gets the impression that being seen at the right parties is the last thing on the minds of most wealthy Chinese in Australia. “They’re not trying to conquer Sydney society,” he says. “They’ve got no interest in it.” Despite the introduction of vacancy taxes on foreign-owned properties unoccupied for six months or more in a year, some Chinese don’t spend much time in their Australian houses or apartments, treating them as little more than boltholes or holiday homes. “When they do come,” says Kwan, “they’re bringing friends from China or other parts of Asia to enjoy the best that Australia has to offer. They have some good barramundi, some good coffee, some good Australian wine, see some shows and then leave.”
In other cases, the main money-earners in families continue to spend most of their time in China, running their businesses, while their partners settle in Australia with their school-age children. The kids may quickly become fluent in English, but stay-at-home parents can find the language barrier hard to surmount. “The biggest difficulty for me is communicating with local people,” one Chinese mother tells me via email, through an interpreter. The woman – who, like several people I interview for this story, does not want to be named – moved to Melbourne from China’s Shandong province eight years ago. She says she has made few Australian friends.
Doris Li, a director of Melbourne marketing agency Bastion S&GO’s China Advisory team, says the “rich wives” tend to stick together. “They make friends with other rich wives. They go out together, play cards, play mahjong. They shop.”
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. “They’re often viewed as having a sense of entitlement, being prone to hedonistic excess,” says John Osburg. “You have stories of wealthy young Chinese crashing their Ferraris.”
They get up to high jinks in this country too, according to Beijing-born Ryan Gollan, whose Instagram profile is “investment banker, art patron, jet setter”. Gollan, 37, is a long-time Australian resident but his circle of friends includes young Chinese who have arrived relatively recently. He recalls one of them pouring him a glass of Château Lafite Rothschild (“I think it was $3000 a bottle”) and telling him: “You’ve got to finish this in one go. Bottoms up!” Gollan sighs. “I mean seriously, you can’t even taste it. Such a waste.” Another of his friends, a 21-year-old Sydney University student – “she’s from a billionaire family” – bought a $100,000 ring at Van Cleef & Arpels, paying for it with her Chinese credit card. “Then she lost it within a week.”
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.”
Parry has no doubt some of that money is spent in the luxury boutiques at Chadstone. The Victorian capital is a mecca for Chinese students, she says, because of its good colleges and universities, and slightly lower real estate prices than Sydney. “This is part of what fuels the retail explosion in Melbourne.”
Cosmetic surgery is another of the city’s thriving businesses. Mark Ashton has seen a surge in the number of young Chinese women visiting his Melbourne practice in the past three years, and as president of the Australian Society of Plastic Surgeons, he knows other doctors are experiencing the same thing. He says the women carry designer handbags – “Prada or Gucci or Louis Vuitton” – and ask for three operations: eyelid surgery (to create European-style folds), rhinoplasty (to make the nose less flat) and breast enhancement.
Ashton has a theory that the quest for a slightly more Western appearance is connected with the Chinese devotion to European labels. While Westerners increasingly aspire to an Eastern-influenced ideal of beauty, among Chinese “there is absolutely a fascination with the West”, he says. “They want what the West has. They want their cars, their clothes, their furniture, their houses, their architecture.” Also their eyelids, noses and breasts.
Their paintings too, apparently. “In the wealthy Chinese community in Sydney and Melbourne, a lot have become serious collectors of Australian art,” says Vogue Australia’s Edwina McCann.
In New York in 2015, billionaire Shanghai financier Liu Yiqian paid $214 million for a 1918 Modigliani nude. He reportedly bought the picture with his American Express card, accruing enough frequent-flyer points to give him and his family free first-class travel for life. Liu, a onetime taxi driver whose business interests now span chemicals, property development and finance, told The New York Times: “The message to the West is clear: We have bought their buildings, we have bought their companies, and now we are going to buy their art.”
It’s the tennis courts that worry David Morrell. An agent for buyers at the top end of the Melbourne property market, Morrell says there are 120 courts in Toorak, the city’s richest suburb, and close to one-fifth of them are now Chinese-owned. Judging by the make-up of crowds at real estate auctions in the suburb, he expects that to rise. At one auction, he says, “we counted 118 people, and 92 were Chinese”.
At another Toorak sale, Morrell watched three Chinese people bid against one another. “I said to the auctioneer, ‘This is like taking candy from babies.’ They just kept their hands in the air. They didn’t understand what the process was, and they didn’t care. It went a couple of million dollars over the reserve.”
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.
Morrell is convinced that the flood of Chinese money has distorted the Australian real estate market, pushing prices so high over the past few years that many would-be local buyers have been locked out. (Both Sydney and Melbourne were on a list of the 10 least affordable housing markets in the world released last year by urban policy think tank Demographia.) He cites Chinese buyer Qi Yang’s payment last August of almost $40 million for a large but slightly rundown Toorak house. That was about $14 million higher than the previous Victorian residential real estate record, Morrell says. And in his opinion, it bore little relation to what the place was actually worth. That willingness to pay over the odds has consequences for other buyers: “This time last year, I was paying $6500 to $7000 a square metre. Now I’m paying nearly $10,000 a square metre. That’s the difference in 12 months, and it’s directly related to Chinese investment.”
Australian law allows foreigners to buy newly built dwellings or vacant land but restricts their purchase of existing homes or apartments. “So why are they bidding for trophy homes in Toorak?” Morrell asks. 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.
Barry Li, The New Chinese author, says he heard from a friend who works for ANZ bank in Sydney that a 15-year-old Chinese boy came into his branch saying he wanted to transfer $3.4 million out of his account. Li says his friend asked the purpose of the transfer: “The kid said, ‘I’m buying a property and this is the deposit.’ ”
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.”
It is clear to The Sydney Morning Herald’s prestige property editor, Lucy Macken, that both the Chinese clampdown on money movement and recent hikes in Australian taxes on foreign buyers have dampened Chinese interest in Sydney’s most expensive houses. And that’s not the only part of the market feeling the impact. Research last year by financial services company Credit Suisse found that foreigners – about 90 per cent of them Chinese – were buying one in four new properties in NSW, and almost one in five in Victoria, but recent reports indicate that Chinese demand for Australian real estate is now lower across the board.
A Chinese man in a dinner suit stands at the front of a group of revellers in a black-and-white photograph displayed at the Chinese Museum in central Melbourne. Despite the elegance of his attire, there is something poignant about the image. In the 1920s, when the picture was taken, Chinese were the victims of institutionalised racism in this country. From 1901, the Australian government had introduced a suite of laws known as the White Australia Policy, which effectively stopped Chinese immigration. The number of Chinese in Australia fell from 40,000 just after the 1850s gold rushes to 9000 by 1940.
Raby believes echoes of xenophobia can be heard in the recent “agents of influence” accusations directed at rich Chinese businessmen. “The whole thing is exaggerated,” says Raby, who argues that gift-giving and socialising with politicians are standard practice for businesspeople in China. “It is seen as a form of security but also it’s a major source of face and status. They want to have a photo with a senior politician that they then frame and put on the desk in their office or on the mantelpiece.”
Raby adds that many Australians seem to think that entrepreneurs have more clout in China than they actually do. “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.”
When John Osburg was in Chengdu researching Anxious Wealth, most businesspeople he knew owed their success partly to relationships with government officials. “But they often didn’t want that for their children,” Osburg says. “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.”
Emigration can be disillusioning. In Osburg’s book, he quotes a businessman who, on his return from a stint in Canada, summed it up as “beautiful mountains, clean water, and boring as hell”. China, the man said, was “really dirty, really chaotic, and really fun”.
The wealthy Chinese I interview through interpreters express no regrets about having come to this country. “Life in Australia is more simple and casual, without much pressure,” says a woman who moved to Adelaide from China’s south-west province of Sichuan seven years ago. Though she misses home – and returns frequently – she loves Australia’s “air, beautiful sunshine and traditional food”.
A businessman who has an address on Sydney’s north shore but still spends most of his time in China, where he manufactures medical equipment and beauty products, says he appreciates the egalitarianism and orderliness of Australia. “Lining up for something seems normal in Sydney,” he says, whereas in China, “pushing in or knowing someone personally to get things done faster is the norm.” On the other hand, Australia’s infrastructure seems to him pretty creaky compared to China’s: “The speed of delivering most services takes much longer. It surprised us that internet takes two to four weeks to get connected and that there isn’t fibre cable or NBN in every home.” He admits, too, that he and his wife find Shanghai more lively than Sydney. “Sometimes here it will seem a bit lonely and dull.”
Businesswomen Sheng Li, 60, and Shumei Jin, 46, live in Sydney but travel regularly to China to oversee their various enterprises. (Jin, who owns automobile spare-parts factories, says she employs about 5000 people. Li assures me Jin is being modest: the number is at least 10,000.) The women are working together on a development proposal for land on the NSW Central Coast. They envisage a highrise hotel, retirement village and yacht club.
Both women belong to the Australia China Entrepreneurs Club, founded by Sydney migration agent Richard Yuan. Only people with assets of $10 million or more can join, says Yuan, who notices that Chinese immigrants grow less concerned about status symbols the longer they live in this country. “Some of my members are driving Porsches and Maseratis and Bentleys,” he says. “But nobody laughs at me when I’m just driving a Mercedes. You know, a normal Mercedes, a C-Class or something. It’s okay.”
When Doris Li was a child in China, hardly anyone was rich. Over coffee at Chadstone one afternoon, the 35-year-old China Advisory director tells me that when she went to shopping centres with her parents, sales staff felt free to be rude to them: “If they thought you couldn’t afford something, they would tell you: ‘Don’t touch that. It’s expensive.’ ”
By the time Li was in her mid-20s, she was earning enough to save $1000 and buy a Gucci handbag. “I was so happy that I could finally afford luxury goods,” she says. “Luxury brands become a way people showcase that they’re successful.”
Kevin Kwan says the stereotype of people covering themselves in labels has become outdated: “You’ve seen the sophistication level increase a hundredfold in the last few years. I was just in Paris and you see the most beautifully dressed, chic mainland Chinese women around now. They’re not just head-to-toe Chanel.”
Vogue Australia’s Edwina McCann finds the same is true of Chinese women in Australia: “A lot of the customers of the big brands are extremely sophisticated consumers. Beautiful taste.”
If some wealthy Chinese seem ultra materialistic, Kwan suspects they are reacting to the extreme poverty and deprivation their country suffered in the past. “It’s almost a way to glorify their ancestors,” he says, explaining the reasoning: “I’m spending because my mother was never able to. Spending for my grandfather. I’m going to enjoy this meal, buy this Bentley, in honour of the generations before me.” And no one is going to tell them anything is too expensive, or not to touch.
By Jane Cadzow