Why background checks on Chinese investors are crucial

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Chinese investors are increasingly engaging foreign companies to buy assets abroad, particularly real estate. Australia, for example, has seen a general rise in property prices in recent years, which could be attributed partly to Chinese investors.

The surge in demand has attracted foreign companies to provide tailor-made services to Chinese investors. For example, McGrath Ltd., an ASX-listed realtor, runs a China desk to assist Chinese buyers of Australian properties. WooBuyers, another Australian realtor, promotes its solutions and local connections on its website targeting Chinese property investors.

However, the property buying spree in Australia comes with reports of suspicious transactions. Last year the Australian Transaction Reports and Analysis Centre, a money-laundering watchdog, reported that it has investigated over A$3 billion (US$2.37 billion) of suspicious transfers by Chinese investors, of which A$1 billion involved property transactions.