China real estate boomer relies on her good 'guanxi'


BEIJING -- Amie Chang -- a California real estate developer born in Taiwan -- has the sort of "guanxi" that makes Greater China tick. As a result, more foreigners will be able to live in relative luxury here.

Greater China is a newly popular phrase that refers to the increasingly close economic ties among southern China, Hong Kong and Taiwan, plus Chinese communities throughout the rest of Asia. It underscores that Chinese capital knows no borders.

"Guanxi" -- pronounced gwahn-she -- means personal connections, the kind long required to do business successfully in Chinese society. These ties can be based on friendship, favors or bribes. But Ms. Chang has the best kind, that stemming from family and politics.

Ms. Chang, 46, is the granddaughter of the late Chang Chih-chung, a hero on the Chinese mainland. General Chang represented the Chinese Nationalists in negotiations with their Communist foes in the 1940s. He ended up defecting to the other side and went on to hold high-level posts in Beijing after the 1949 Communist revolution.

For much of her life, that didn't do Ms. Chang much good. She's the daughter of the only son of General Chang to flee to Taiwan with the Nationalists. There, her family was disdained by the Taipei regime; for many years she wasn't allowed to leave the island.

But when Ms. Chang came here a few years ago, after more than a decade in real estate in the San Francisco area, she was warmly welcomed as a VIP. And that "guanxi" meant the chance to join the growing number of Hong Kong and Taiwanese players in China's nascent but red hot real estate market.

"Everyone doing a real estate project in Beijing has some kind of guanxi," Ms. Chang says. "That's the way you can get land here. My grandfather is still honored here. He contributed a lot to this country. So they feel they have to accommodate us a little bit."

When it is completed in 1995, Ms. Chang's $27 million deal will consist of three 18-story towers with as many as 400 modern apartments. She paid more than $7 million an acre for the land and hopes to sell the more than 1,000-square-foot units to overseas Chinese, foreigners and maybe even a few mainlanders for more than $200,000 each.

Some Chinese commentators have bitterly contrasted such upscale accommodations with those of most urban Chinese, who typically squeeze into two-room flats they rent for about $1 a month.

The luxury flats are also striking given that China did not even have a real estate market until 1988, when the government first allowed the sale of long-term land leases -- thereby setting off the current torrent of glitzy projects.

Some of the more speculative of these deals have been scrapped this year as Beijing has tried to cool down China's overheated economy. But Western-standard housing and office space are so hard to find in Beijing and Shanghai that rental rates now exceed those of midtown Manhattan; $5,000 a month is not an uncommon rent.

So even projects that won't open until 1996 -- such as "Sunshine Plaza," a huge city within a city that now is just a square-block hole in the ground in north Beijing -- already have sold 60 percent of their units for up to $350,000, its developers say.

As is customary in this part of the world, the buyers -- mostly from Hong Kong, Taiwan and Japan -- have to put up the bulk of the total purchase price long before the building is even finished.

If all this sounds like easy money, Ms. Chang warns that even with her "guanxi" there's been no end to the problems she's encountered in trying to erect her buildings. She's had to get approvals from 15 different government organizations; she's had to pay to relocate villagers living on the land she leased.

"It's frustrating," she says. "Everywhere you turn, there are difficulties. I wouldn't say it's a nightmare, but it's definitely been a learning process."

Still, she and other investors in Chinese real estate believe, this is much the same way that many families amassed huge fortunes over the decades in Hong Kong and Taiwan.

"We have a joke in Taiwan," Ms. Chang says. "We say that we're very lucky because we're getting a second spring in China. We had the opportunity in Taiwan, and now we have it again in China."

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