Greentown the latest Chinese developer to expand overseas despite stricter capital controls

Greentown China Holdings, one of the top 10 Chinese residential developers, announced its aggressive overseas investment plan this week despite mainland residents recently being banned from converting yuan into foreign currencies for overseas property purchases.

“The focus will be core cities in Australia [and] North America... such as Sydney, Melbourne, Los Angeles and San Francisco... and Southeast Asian countries,” Cao Zhounan, chief executive of Greentown China said in the announcement.

The developer, which specialises in luxury apartments, completed a record 96 billion yuan in contracted sales in 2016.

It is also the latest to follow Dalian Wanda Group and China Vanke in a wider mainland developers’ overseas expansion frenzy, regardless of the fact the Chinese government has stepped up its clamp down on capital outflows by both institutional and retail investors to prevent further depreciation of the yuan.

Effective January 1 this year, the country’s foreign exchange regulator has prohibited Chinese residents from conducting foreign currency purchases at domestic banks for the purpose of overseas property investment. This had been a grey area in the past, allowing some investors to skirt the rules.