Zeng Wei angers Sydney by knocking down 106-year-old harbour mansion

In recent weeks, wrecking crews have embarked on a job that symbolises the international economic clout of the Chinese elite, demolishing a mansion with stunning views of one of the world's most picturesque harbours.

Craig-y-Mor, an elegant 106-year-old home owned over the years by several prominent Sydney businessmen, was bought in 2008 by the son and daughter-in-law of a former senior member of China's Politburo for A$32.4 million (HK$235 million).

The new owners, Zeng Wei and Jiang Mei, sought permission to demolish the two-storey brick house and replace it, at a cost of A$4.5 million, with a five-level concrete structure with huge windows. The plan horrified some neighbours and government officials, who thought the building would be too big and unattractive. After the municipality refused to allow the demolition, Zeng's lawyers appealed to a New South Wales state judge, who overruled that decision.

Credit Suisse estimates that 18 per cent of new houses and flats in Sydney are bought by Chinese citizens. In Melbourne, the figure is14 per cent.

These figures are likely to rise. To stimulate the economy, the Australian government recently expanded a programme to grant permanent residence to foreigners prepared to invest at least A$5 million in Australian businesses. To date, 90 per cent of the applicants have been Chinese.

Concerns that Chinese buyers could be driving a property bubble are so widespread that the Australian parliament recently began an investigation.