Two of China’s largest insurance companies are making their first investments in the US commercial real estate market by buying a majority stake in a project in Boston, Massachusetts. China Life Insurance Group Co. and Ping An Insurance Co. are committing $500 million for a development plan in Boston’s Seaport District that will include an office building, condominium tower, and renovations on the city’s Pier 4. New York developer Tishman Speyer Properties is also investing.
This comes as China’s Insurance Regulatory Commission (CIRC) further relaxed its regulations on insurance companies, giving firms greater flexibility to invest abroad. Under the new rules, the Hong Kong-based asset management arms of these companies would be allowed access to 45 different markets, including the United States. The Chinese Government initially changed its policy in 2012, allowing insurance companies to make property investments in foreign markets for the first time. Since then, international investment by Chinese insurance companies has increased from zero to at least $500 million a year since 2012. In 2015, investments by insurance companies have already doubled what they were in the previous two years combined, to $2.5 billion.
Meanwhile, China Life and Ping An insurance companies are not the only insurance groups to invest in property in the US. In October, Anbang Insurance Group Co. acquired New York City’s Waldorf Astoria hotel for $1.95 billion. In addition to Chinese domestic insurance companies buying US property, other Chinese conglomerates are getting into the US insurance market. Earlier in 2015, Fosun International Limited bought its way into the US property and casualty insurance market after purchasing the Southfield, Michigan based Meadowbrook Insurance Group. The acquisition marks the first time a US insurer has been fully purchased by a Chinese business.
Chinese companies in total were involved in 152 deals within 26 US states in 2014, investing nearly $12 billion across the country. Between 2000 and 2014, Chinese companies invested more than $47 billion in the US, a figure that is likely to grow in the coming years.
Nate Schlabach is a Research Intern at the East-West Center in Washington and a graduate student at the Center for Justice and Peacebuilding at Eastern Mennonite University.