Within a year of putting its initial offerings on the market in December 2015, Forest City had sold 80 percent of all units on the first island. The project is a relatively cheap alternative to property havens in North America, Australia and China itself. A luxury two-bedroom apartment costs only $180,000 in Forest City, about a third of what it would command in Shanghai. Still, the sheer volume in sales means that Forest City raked in more than $3 billion in 2016 alone, according to the company. Much of this money was Chinese flight capital, but Country Garden has tried to make buying into Forest City seem almost patriotic. One Olympic-themed show unit features the gold-medal shooters Du Li and Pang Wei, who have invested here, too. (A sign proclaims in Chinese: “Welcome home, Olympic champions!”) Throughout the sales tour, potential buyers are reminded that Forest City sits in a strategic geographical position for China — astride a vital maritime route that connects their homeland with the rest of the world.

But after a banner year in 2016, Forest City encountered significant setbacks in 2017 — revealing some of the fault lines created by the phenomenal growth of Chinese wealth. The uncomfortable fact that hundreds of thousands of Chinese may soon be residents of Malaysia led a former prime minister, Mahathir Mohamad, to lash out at the project last year. “We should realize that once we sell land to others, we no longer have any ownership over it,” he said. The sultan of Johor accused Mahathir of “playing the politics of fear and race” ahead of nationwide elections in which the former prime minister is running. But Mahathir, 92, railed on. He even compared the situation to the sultanate’s sale of the neighboring island of Temasek to the British nearly two centuries ago. That island is now the wealthy city-state Singapore.

Geopolitics only added to the controversy. Forest City sits just a few miles off the Straits of Malacca, an indispensable channel for commerce ever since the beginning of the global spice trade in the 16th century. Today the straits are China’s Achilles’ heel, a vulnerable choke point through which 80 percent of its oil imports flow. China is building pipelines, ports and railways in Pakistan and Myanmar to relieve its dependence on this waterway. It is also lavishing Malaysia with large investments, like a $7.2 billion port complex in Malacca, to secure its position along the straits. Forest City is not a government infrastructure project, but it is a largely autonomous Chinese outpost in a strategic location. “Where else in the world has a foreign company created new land in another country, populated it with people from its home country and asserted sovereignty over it?” Moser asks. “This is a brand-new level of colonial expansion.”

And yet the greatest blow to Forest City last year was struck by the Chinese government, through a set of new restrictions that underscore the tension inherent in Beijing’s economic vision, in which it encourages companies to “go global” yet fears the exodus of its citizens’ new wealth. Over the last decade, China has seen an estimated $3.8 trillion in capital leave the country, much of it going into offshore real estate. In an effort to crack down on rampant capital flight, Beijing tightened its capital controls, making it nearly impossible for investors to send large amounts of money out of the country. The limit on foreign transfers remains $50,000 a year per person, but now senders must sign a pledge that no money will be used to buy property — and face investigation if they violate the pledge. The tougher controls have strengthened China’s currency and stabilized its foreign reserves, but many Chinese investors, including some Forest City customers, were left stranded: They had made down payments on their tropical idylls, but banks wouldn’t let them send the rest.