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EMIGRES FEEL CHINA'S PULL
Affordable housing, food, recreation drive a trend of reverse migration
- Vanessa Hua, Chronicle Staff Writer
Thursday, August 24, 2006


Philip Hu fled Shanghai as a child after the communists took over China in 1949. After growing up in Taiwan, he went to UC Berkeley and eventually became a Silicon Valley tech executive.

But he and his wife, Tanlie Chao, 55, have sold their house in San Jose and plan to retire to Shanghai in September, part of a reverse migration that reflects a turnabout among Chinese emigres.

"I've been living here and speak the language," said Hu, 60. "But inside I'm very Chinese."

Well-to-do Chinese around the world are being drawn homeward by affordable housing, food and recreation -- as well as a sense of belonging. Driving this trend are China's booming market economy, improved transportation and telecommunications, potential returns on real estate investments and the emergence of a transnational identity for many of the emigres and their children.

All this is despite the pollution, horrendous traffic and what Hu said are people in Shanghai who lack the grace to stand in line or to apologize for jostling someone.

"Everyone grabs whatever they want. You get used to it after a while. They don't mean to be rude, but that's just how they were brought up," said Hu, who will leave behind two grown sons and a stepson.

He and Chao purchased their first Shanghai condo four years ago for $250,000 at the urging of his brother, who was buying two units in the same building.

"The center of gravity is shifting to China, but to be successful, you need to be successful in the United States," said Peggy Liu, 38, co-founder of a venture capital firm, who moved from the Bay Area to Shanghai with her husband and two sons -- following her parents. "You need a foot in both worlds."

Culture and history also play a role, academics and community observers say.

"It all comes down to one issue: the sense of belonging in America," said Marlon Hom, chair of Asian American Studies at San Francisco State University. Until the 1940s, he noted, Chinese immigrants often returned home because American society rejected them and denied them citizenship. "In the past, it was discrimination from the white society; today, it's ethno-centrism among some Chinese immigrants."

Ethnic Chinese in Hong Kong, Southeast Asia and Taiwan, as well as the United States, are cashing out their investments and putting the money into Shanghai's real estate market, said Kenny Ho, associate research director in the Shanghai branch of Jones Lang LaSalle, a real estate and money management firm.

As a result of this booming demand, as well as rising incomes in China and a lack of other local investment options, prices in Shanghai's real estate market have more than doubled since 2001, financial analysts say. But the skeletons of new buildings continue to rise across the city, attracting people buying properties as investments, future retirement homes or both.

For Bay Area residents not yet ready to move but interested in investing in Chinese real estate, Milpitas mortgage broker and sales agent Infohome sells shares in residential and commercial buildings in China using scale models with miniature silver towers and broad avenues.

Since spring 2005, Infohome has sold about 240 commercial and residential units for about $150,000 each from its showroom in a Milpitas strip mall, where a variety of other businesses also cater to Asians.

"China is not a mature market, but a baby that will continue to grow no matter how much it is fed," said John Chen, founder of Infohome. Many of the sales contracts he completes require owners to hold their property for five to 10 years in return for a guaranteed average annual rent payment equivalent to 8 percent of the original investment.

In China, there have been many complaints about such rental guarantees -- that developers allegedly inflate the value of the property and then pay a slight penalty to break the lease. But Chen, a San Francisco native and son of Taiwan immigrants, said the contracts he negotiates have penalties of 100 percent of remaining rent they promised.

Eleanor Chang, director of marketing for United Commercial Bank, which primarily serves Chinese American customers, has noticed an increase in the last five years of ethnic Chinese from the Bay Area buying property in the bustling cities of Shanghai, Shenzhen, Guangzhou and Beijing.

"In the U.S, the stock market is risky, going up and down, and there's not a huge opportunity to make a big gain in investments," she said. "In China, there might be a bigger upside, if they're willing take the risk."

In an attempt to cool down the overheating market and discourage speculators, the Chinese government instituted new regulations last month. Only foreign citizens who have lived in China over a year or have representative offices in China can buy housing, but loopholes remain.

Some home-buyers considering retirement in China purchase condos to use for business and vacation in the meanwhile. It isn't possible to determine how many buyers are speculating on the market and how many actually intend to move to China.

Immigrant Michael Ngan purchased a $42,500, three-bedroom flat in Guangzhou, in southern China, when he was working at an advertising agency there in 2002. He moved to Newark last year, joining his wife and two sons, 23 and 26, who had immigrated in 1994. His four brothers, sister and mother also live the Bay Area.

When he retires, he would like to spend half the year in China and half here. Although life in Guangzhou is more exciting, with more entertainment and great restaurants, the tug of family in the Bay Area is too great, said Ngan, 55. "It's incomparable."

Hu and Chao have three condos in Shanghai and one in Ningbao, which they have decorated with touches such as a custom 10-foot-long copy of a famous Chinese landscape in one condo's dining room and ornately carved door panels in the living room.

"The fun part is to go out to shop for all the construction materials," Hu said. "You think China is much more backward than here, but you go to those markets -- blocks of all kind of things."

Hu and Chao have been spending more time in Shanghai each year -- living there in spring and fall and moving back in summer and winter, like "migrating birds," Hu said -- but they decided maintaining two residences was too much trouble.

In many ways, he has assimilated since he moved to the United States in 1969 -- he speaks unaccented English and is tanned and fit from running, skiing and playing golf. Yet, "it's very natural for me in China," he said, "to be surrounded by my own people."

In Shanghai, the green fees are reasonable -- and include caddies. When he and Chao play mahjong, a maid prepares food for them, Hu said. And Chao said she can take private classes in painting or flower arranging and get frequent massages.

If Chao and Hu have any major illness, they will fly back to the United States. He's canceling their health insurance and will pay out of pocket until they are eligible for Medicare when they turn 65, just as any other American citizen would be.

They plan to stay in touch with family -- who live in Taipei, Hong Kong and several U.S. cities -- with Internet phone service, e-mail and visits.

Chao will leave behind her 90-year-old father and brothers and sisters. Her American-born son, who works in Taiwan for his father, would rather she stay in the Bay Area because he plans to move back here.

"I have mixed feelings," she said. "Here it's so pretty, and the air is good."

For his part, Hu is reconciling the reality he knows with his learning from childhood that communists were the "evil empire."

"These people are Chinese, and they're basically the same as we are: one of the most pragmatic people in the world. Once you have them taste money, they never let go. Once they get used to the capitalist lifestyle, they never go back to communism," he said. "No way."

Hu has reunited with relatives who never left China, though a distance remains. "They have a totally different background and thinking," he said.

"You feel in China, people look at you, how you dress and act differently. They think you're wealthy, better educated, and can speak English. You live in a better house. You know more than they do. They give you more respect."

He and Chao socialize with about a dozen couples in Shanghai, many with similar backgrounds. And Hu recently reunited with a middle-school classmate from Taiwan at a mahjong game. That classmate in turn re-introduced him to a high school classmate who also lived in the United States before moving to China.

"It made me feel at home in Shanghai, that I was able to run into people. And will continue to do so," Hu said. "We're all going the same way."



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New home, old home
Shanghai

Population: 20 million


Size: 2,448 square miles

Population density: Approximately 8,170 per square mile (the world's fourth most densely populated city, after London, Mexico City and New York)

History: Shanghai was a small fishing village until the British colonized it in the mid-19th century. It grew as a trading post and hub of international culture and today is considered China's economic and cultural center.

Economy: A quarter of all commodities in China pass through Shanghai ports. The average person in Shanghai makes $4,910 a year, nearly five times the national average. The fast-growing city has nearly 2,900 skyscrapers that are 18 stories tall or taller.


San Jose

Population: 953,679 (6.7 million in nine-county Bay Area)

Size: 177.8 square miles (incorporated San Jose)

Population density: 5,394 per square mile

History: San Jose was California's first civilian settlement. It was incorporated in 1850 and served as the site of the first state capital.

Economy: Today it is the hub of Silicon Valley and the largest city in the Bay Area, which has the fifth largest gross regional product in the nation. The new, 18-floor City Hall is San Jose's tallest building.

Sources: Bay Area marketing Partnership, City of San Jose, Frontline World, transit.511.org

E-mail Vanessa Hua at vahua@sfchronicle.com.