Uh, not so much. Being priced out of home ownership means a smaller and smaller portion of Americans would (do) benefit from this increased "total wealth".
It’s a net positive if it was a 2 way street. Currently, I’m competing with the entire world to purchase a house in the Valley. Chinese investment is in SV, LA, NYC, Vancouver, Toronto, NZ, Sydney and Melbourne. All areas where locals are priced out, income inequality is rampant, and only those who sell are realizing actual wealth. Salaries in those areas are higher solely for housing prices. That means our companies losing out on billions due to foreign unfair investment.
Chinese aren’t moving to these areas in many cases. They are just investing and parking their money, some of it through illicit means. In Canada, the majority of Chinese RE investment is through the drug trade. They are legitimizing this.
In NZ xenophobia has increased significantly so much that they are planning to block all foreign investments period. That doesn’t seem to be a net positive to me. Australia has jacked up foreign investment taxes twice and Canada 3 times in just 2 years. The latter are also turning more xenophobic and honestly I don’t blame them.
Would you even want to want to buy property in what you describe as an authoritarian, borderline totalitarian country?
The Chinese don't want their property to be subject to whims of party officials, so they invest elsewhere. This is a net positive for Americans (increasing real estate prices mean increasing total wealth), and also a creeping long-term negative for China which they can't easily fix without relinquishing control. Rather than trying to force the issue, USA should continue to take the high road and let the Communist Party slowly boil. It may take a long time, but the Chinese will eventually want their political freedom because they don't have real economic freedom without it.