Chinese investors have historically contributed significantly to foreign investment in California. The numbers dropped sharply last year, from $16.2 billion in 2016 to $7.3 billion in 2017. San Francisco and Los Angeles in particular saw a decline of 52% and 67% respectively. The largest decrease was in money spent to acquire or build hotels. Chinese investors are instead taking their business to the United Kingdom, which presently has a weak currency.
It’s not just California, though. A similar level of decline has occurred throughout all US top markets. It’s speculated that the major reasons for the decline are increased controls by the Chinese government, increased involvement by the US Committee on Foreign Investment, and better opportunities in other countries. California is still an attractive place for investors, but policies it has no control over are negatively affecting investment. Other factors include rising interest rates, imminent trade war with China, and the uncertainty surrounding a soon-ending visa program.