Why would holding title as an LLC be advantageous to Chinese investors?

LLC provides a layer of liability protection, but it is a complete pass-through tax entity.

I will start by saying that the last thing you want to do is to hold title individually. That would subject your estate to US taxes. The first thing to look at is creating the most tax-advantaged method of holding a title. That can be different for each potential owner. An LLC is a good entity because it limits the personal liability of the owners. Because the US and PRC have no tax treaty, part of your investment may be debt. Do you have companies offshore that do qualify for US tax treaty protection? You need to discuss your current investments, whether you plan to own individually or with others and determine the best tax structure first. Then whether you implement an LLC or a Trust, for example, will make sense.

This is common practice for any purchase of real estate in the US. The reason is that if real estate is owned in the name of an individual, any liability that is incurred in connection with the real estate becomes the personal liability of the individual owner. By putting the property into an LLC, then the liability of the individual members is limited to their investment in the particular property owned by the LLC and their other assets cannot be attached to satisfy a judgment or other liability relating to the property. It is extremely rare and ill-advised to own commercial real estate individually. LLCs are preferable to Corporations for tax reasons as LLC allow losses (i.e. depreciation) to be passed through to the individual investors while having the liability shield described above. Corporate ownership provides the liability shield for the individual owners but does not permit a pass-through of depreciation for tax purposes, and also had double taxation--tax payable at the corporate level and then again to the individual, so LLCs have become the preferred vehicle for real estate investment.