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[Yep, this reminds me of how Japan thought they were going to take over the world economically back in the 80’s, were buying up everything all the world at inflated prices, and then it all came crashing down!]

Buying everything up abroad was the right move. That’s how they got the cash to pay their bills when their Japanese investments came crashing down with no bids, because nobody knew what the bottom was. Now, if they had sold all their domestic holdings and moved completely abroad, they’d have been sitting pretty.

A good bunch of Chinese investments abroad have been moves in this direction. The problem for Chinese entrepreneurs is that the government rightly sees this (in light of its policy that it should be able to seize any Chinese person’s property at will) an infringement on its prerogatives. So it has acted to force Chinese entrepreneurs to divest many of their foreign purchases and repatriate that capital to China.

A second problem is a hugely-inflated real estate market like China’s always needs fresh cash. It can’t stay at the same level for any length of time, or a crash will occur, as momentum players pull out. So when private Chinese capital invests in far cheaper (relative to the Chinese market) assets abroad, by selling some of their Chinese assets, they are, in effect, sticking pins in the Chinese financial bubble.

When Li Ka-shing’s, Hong Kong’s richest man, sold off his Chinese assets (presumably to avoid having them held for ransom or seized outright by the CCP), this was greeted with accusations of treason by the party’s organs. He is now divesting his holdings in Hong Kong as well.

http://blogs.reuters.com/breakingviews/2015/09/30/china-criticism-makes-even-li-ka-shing-defensive/
[The 87 year-old has invested in mainland China for decades through companies he controls. Yet in the past few years Li has been placing increasingly large bets on infrastructure and telecom assets in developed markets, particularly in Europe. A corporate reshuffle which shifted his flagship Cheung Kong Holdings’ domicile from Hong Kong to the Cayman Islands added to the sense he is gradually distancing himself from China. More recently, the sale of property in Shanghai and other Chinese cities prompted a flurry of criticism. A think tank associated with state media outlet Xinhua accused Li of selling just as China’s growth was slowing.]