Seattle is sucking up some of the global cash with nowhere to go.
Seattle is sucking up some of the global cash with nowhere to go. Charles Mudede

Those who followed the recent fraud investigation concerning the construction of the Potala Tower on Fourth Avenue in downtown Seattle—which was brought to a halt late last month by the Securities and Exchange Commission—would have noticed that a large number of its investors were Chinese.

The man behind Potala Tower, Lobsang Dargey, the CEO of Path America and the man who the SEC alleges to have pocketed lots of the project's money for personal uses, "raised about $85 million from 170 Chinese nationals, with each investing $500,000 plus a $45,000 administrative fee." The Chinese contribution to this project was so pronounced that its groundbreaking ceremony, which was attended by Mayor Ed Murray, had traditional Chinese performances and rituals to bring the development good luck.

What this misadventure makes clear is that the rich in China have the same problem as the rich everywhere else in this world: the lack of places to put surplus cash. At the moment, Seattle is providing a terrific solution to this savings-glut/investment-dearth problem for high-end Chinese investors. And in a way, the president is here to thank Seattle for absorbing some of this surplus.

A concluding note: The current crash of Chinese stock markets mostly involved the kind of investors who don't have the resources to invest in exotic Seattle. These are low-end investors, and they were encouraged by president Xi to make quick money on stocks, and to spend their gains on Chinese goods. This dream rapidly inflated Chinese stocks in the early spring, but the bubble burst before the summer was over. In the process, the markets lost $3.5 trillion in value. President Xi is very much in the middle of China's turbulent experiment in financialization.