The same fears were expressed when the Japaneses were buying up prime real estate in U.S. cities (Rockefeller Center, etc.) in the late 80s.

The result of that was that the Japanese asset bubble collapsed, all the (generally heavily-leveraged) foreign buyers found they were broke, and Americans bought back the properties at fire-sale prices.

I wouldn't be surprised if the same thing happens again when the Chinese asset bubbles crash. Locals have a huge information advantage over absentee landlords; this is far more likely to end poorly for Chinese buyers than for American residents.