A weaker loonie may en­tice Chi­nese

China Daily (Canada) - - FRONT PAGE - By WANG RU in Bei­jing wan­gru@chi­nadaily.com.cn

As the Cana­dian dol­lar con­tin­ues to weaken, 77 cents to the US dol­lar as of Wed­nes­day, more in­vestors from China may seize the op­por­tu­nity to spend in Canada.

An­a­lysts point to sev­eral rea­sons that have led to the fall of the loonie. They in­clude a sus­tained fall in oil prices and other com­modi­ties that Canada ex­ports, in­ter­est rate cuts by the Bank of Canada that have re­sulted in the low­er­ing of Canada’s cur­rency, the rise of the US dol­lar as the coun­try’s econ­omy re­cov­ers, and a slow­ing Chi­nese econ­omy.

The Bank of Mon­treal ex­pects the Cana­dian dol­lar to con­tinue its slide to about 75 cents (US) as fall ap­proaches, and it warns the drop is bad news for con­sumer spend­ing.

Con­versely, it may be good news for Chi­nese in­vestors, new im­mi­grants, tourists and stu­dents.

The trade of Cana­dian dol­lar to Chi­nese yuan has dropped from 6.3 to the latest 4.8, de­pre­ci­at­ing around 23 per­cent in one year.

“Though it is too early to ex­pect more Chi­nese com­pa­nies will es­tab­lish oper­a­tions in Canada be­cause of the cheap Cana­dian dol­lar, Chi­nese im­porters should take the op­por­tu­nity,” said

Yuan Zhan­ling, the for­mer eco­nomic and com­mer­cial coun­selor for the Chi­nese em­bassy in Canada.“It is a good tim­ing for China to im­port the key com­modi­ties from Canada as Chi­nese cur­rency re­mains strong, such as wheat, potash, lum­ber and min­eral prod­ucts.”

In July the Chi­nese in­vest­ment firm Bei­jing Tairui In­no­va­tion Cap­i­tal Man­age­ment Ltd agreed to in­vest C$80 mil­lion to ac­quire a strate­gic 51 per­cent stake in Cana­dian potash miner Western Potash Corp.

The prop­erty mar­ket in Canada is in­creas­ing in pop­u­lar­ity, gain­ing an edge from the weak­en­ing cur­ren­cies.

More Chi­nese in­vest­ments will go to spend in Canada’s prop­erty mar­ket, es­pe­cially in Van­cou­ver and Toronto.

It was re­ported in July that the prop­erty mar­kets in such ar­eas in Canada have seen an un­usual boom. The prices of houses and apart­ments in good lo­ca­tions are soar­ing.

A real es­tate agency in West Van­cou­ver said that new Chi­nese in­vestors are ma­jor buy­ers in the re­cent hot mar­ket.

In the re­cent re­port by the Guardian, real es­tate agents in Aus­tralia and Canada were brac­ing for a surge of new in­ter­est in their al­ready hot prop­erty mar­kets, with early signs that “wealthy Chi­nese in­vestors are seek­ing a safe haven from the tur­moil in Shang­hai’s stock mar­kets.”

Kevin Chen, a land bro­ker in Van­cou­ver, said in an email in­ter­view that some new Chi­nese im­mi­grants and in­vestors worry the Chi­nese yuan might de­pre­ci­ate as well, so many of them have de­cided to buy.

Tourism and recre­ation is a win­ner in Canada. Chi­nese in­vestors and trav­el­ers will flock to Canada be­cause of the cheap loonie.

The low Cana­dian dol­lar is at­tract­ing for­eign buy­ers to wellestab­lished recre­ational prop­erty mar­kets across the coun­try.

Ever­grande, a ma­jor Chi­nese real es­tate group, has re­cently pur­chased the Fair­mont Le Château Mon­te­bello re­sort com­plex in west Que­bec.

“I will go ski in the Whistler Moun­tain in Bri­tish Columbia in Canada this win­ter, one of the skiing par­adises that I haven’t been yet,” said Jin Xiao, a 31-year-old ski lover in Bei­jing.

“Be­cause of the cheaper price, I will spend more, for in­stance, on a bet­ter ho­tel and shop­ping. It would be feel­ing like ev­ery­thing is dis­counted.”

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.