Thursday, March 31, 2016

Hidden Costs Of Anbang’s Western Spending Spree


By Sebastian Mallaby, March 30, 2016 Financial Times

A thrifty Asian powerhouse saves and invests its way to economic stardom, inspiring admiration and paranoia in the rich world. The powerhouse begins to lose momentum, driving its corporations to switch their investment appetites towards assets abroad. But, lacking worldly experience, the corporations bungle. Billions in hard-earned national savings disappear down a black hole.
Such was the experience of Japan from the late 1980s, when it snapped up trophy assets from New York’s Rockefeller Center to the Hotel Bel-Air in Los Angeles, for which a Japanese acquirer paid the equivalent of $2.3m in 2016 dollars — per room. Now, a quarter of a century later, China may be following the same script, to judge from today’s merger wars at least.


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