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CREW Roundup: What Previous Crises Can Tell Us About China


When ex-CNBC chief economist Marci Rossell worries, it’s not about the train wrecks she sees coming—but the ones we’re not expecting. And she doesn’t believe we were anticipating the slowdown in China, which she says is more severe than we think. But don’t panic yet.

Marci says capital markets and the Fed are dealing with two opposing forces right now: the global slowdown caused by the Chinese economy and the most positive environment the US consumer has seen in the last decade. “How long will it take the snow and sand to settle?” she asks. Her estimate: a three- to six-month problem in the US but a much longer experience for the rest of the world.

Since the Chinese stock market peaked in June, it has fallen 37%. “So if you’re feeling bad about your portfolio, be glad you’re not in Shanghai,” she told attendees during her CREW Convention luncheon keynote. She says that the current Chinese crisis is a combination of two events we saw before: the Japanese financial crisis of the late '80s and early ‘90s, plus the Asian financial crisis of '97 and '98.

Those events didn’t cause a recession in the US as expected, and she suspects the same going forward. Back then, "we underestimated the effect of cheap commodities on the US economy," she notes. While there’s a nasty transition period (which we’re in now), there will be a consumer boom as people react to commodity prices dropping. When oil and gas fell in the late '90s, what did Americans do? Went out and bought SUVs, she points out.

The US is fundamentally back on very solid ground, and that’s related to the strength and the position of the US consumer, whose confidence is back to levels we saw before '07. In addition to inexpensive commodities, the dollar is strong and interest rates are only rising incrementally. The housing recovery is a year ahead of schedule, and unemployment rates are normal again. While there hasn’t been wage growth, she predicts that will change, because employers will be concerned with retaining workers. And with turmoil overseas, it may only increase the number of investors looking to place their money in our real estate as a safe haven.


Kevin Stamper, executive director of the Seattle Regional Center, showcases several of the center’s projects funded with the help of the EB-5 program, including South Lake Union’s Dexter Station, and the Fifth and Columbia Tower in Seattle, Treasure Island in San Francisco, and the Greenland project in Los Angeles. 

The Seattle Regional Center is one of the most active of the 700 regional centers in the US, processing roughly half of the EB-5 work going through the system.

The EB-5 program, which allows foreign nationals to invest in commercial enterprises in exchange for green cards, has surged in the last six to seven years as traditional funding sources have dried up. "A lot of the projects underway in the last several years couldn’t be done without EB-5 financing," he said.

Kevin participated in a panel discussion for CREW Network, currently holding its annual convention in Bellevue, along with area experts Jessica Yu, an associate at Stokes Lawrence, and Loren Cohen, attorney for MC Construction Consultants, developer of Tacoma’s Point Ruston mixed-used waterfront project.

The panelists provided an overview of the EB-5 program, including its benefits and challenges, as well as a look at the use of EB-5 financing from the developer’s viewpoint.