Following the spectacular collapse of the once-mighty Ralan Group, not only have they left creditors languishing in $500 million of debt, my attention now turns to those affected most without a voice – the thousands of buyers who stand to face financial ruin after it has come to light that $300 million worth of deposits are unlikely to ever be reimbursed.
Ralan Group and their sales team methodically and strategically targeted the Asian community knowing that we intrinsically do business based on word of mouth and trust. This promissory note has now been broken. The impact this will have on the Asian community and what it means for other developers trying to sell to Asians is going to have far-reaching consequences.
But what has angered me most is that whilst it’s almost normalised to see porcelain skinned Asian women carry their Hermes or LV bag, young Chinese students drive Porsches and go home to their $20 million waterside mansions, this represents less than 0.001% of the population.
As the daughter of a first generation immigrant, I can tell you that not all Asians are crazy or rich. They work 100 hour weeks of manual labour to save their dollars. Most of it will be spent on their children’s education. There is even a saying that if you ripped every dollar apart, you will find blood and sweat. This is synonymous to our work ethic.
As the movie Crazy Rich Asians explore some of the inner workings of this ostentatious life, I read an article in the Australian Financial Review about this topic so thought to also share some of their commentary on how and where they amassed their humble fortune.
?With a population of 1 BILLION people, this is an asset in itself, making their economy literally self sufficient with plenty of cheap exports that the rest of the world buys. This has been the engine room but unfortunately, it also means exploitation of some workers. This is not okay.
?Having been through centuries and cycles of famine and drought, its part of the Asian value to simply SAVE. They save for a rainy day, they save for a sunny day, they SAVE SAVE SAVE. Yes mum, thank you for reminding me. China’s national savings rate is close to 50%, the US is around 20% so with more cash on hand, you can invest more. Logic.
?Real estate is a big money churner in China. Real estate prices in major Chinese cities have grown six to seven times within a short time because of the rapid economic growth and a corresponding rise in urbanisation. This is a sign WHY you see so many Chinese people queuing up to Australian apartments over east.
?They work SUPER HARD. They work day and night. For those who have experienced the pulse of big Chinese cities (Shanghai and Hong Kong), you only need look to the nightlife to see how working around the clock is common: business, personal lives and social circles in Asia are frequently intertwined. As someone who used to work these outrageous hours, it’s definitely not for me.
There is no doubt there is plenty of corruption in China and across Asia, but equally there are plenty of hardworking mums and dads who have made their wealth from making nails, sewing clothes or supplying plastic bags. Some of Asia’s most notable business identities have all come from these humble beginnings.
This is why what just happened with Ralan Group is NOT OKAY – not just for Asians, but for every buyer who now stands to lose a large portion of their net worth.