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Q: Why are mainland Chinese buying up so much property?

There was a huge news story in New Zealand last week where a real estate agent of Chinese origin posted on her Facebook page the news that she'd just sold an Auckland property to some buyers from China "just off the plane and looking for more houses". This woman was inundated with abuse.

 

I wrote to two MPs from two different opposition parties and followed and contributed to blog posts where the story was being discussed. I know very well that large amounts of money have been laundered out of China for years and that politicians in NZ and Australia in particular are very willing to do the bidding of Chinese interests in order to secure cozy sinecures on the boards of Chinese controlled companies in their retirement. Former NZ prime minister Jenny Shipley, for example became the chair of a public infrastructure company called Mainzeal and was a director of many companies including Haier, because she allowed the merger of a whiteware manufacturing company with Haier. She also blocked off protests from Chinese dissidents when Jiang Zemin visited the country in 1999. The message this silly old bitch has sent the political class in NZ and Australia is that kowtowing can be very lucrative.

 

Anyhow, this aside, I'm just wondering why these people come over and buy properties. I have been listening to a Scottish academic by the name of Mark Blyth who put forth the following theories: property rights are a commodity which are being sold to the Chinese and the reason they want to buy them is because corruption is the by-product in a system where there are no property rights.

 

Since the party is being purged in an anti-corruption campaign, many of the officials, their families and the proxies they use to conduct their shonky businesses have lost all security and will look for any place they can to park their money where the party can't confiscate it in the event of a crisis.

 

So what's this talk of a crisis? It makes me think of the behaviour of tech companies in the 1990s during the dotcom bubble. The reason so many of them were buying into real estate in market which they believed were detached from the wider economy was to use the ownership of the properties as hedges to minimize the losses when their dodgy derivatives scams collapse like the house of cards they were.

 

So why would non-residents buy a property in a country so far away? It's not like they can put a towbar on their car and bring the property back to China and use it the way they could if they used precious commodities as a hedge instead.

 

Is it just conspicuous consumption and face on a grand scale or are they mimicking the behaviours of American financiers and tech entrepreneurs prior to the financial crisis of 2008, but failing to fully think through their actions as so many people in China are prone to do?

 

They make the Chinese government look completely inept due to the $50,000 per ID rule, they drive up the cost of property so locals can't use it, they bribe politicians and create incentive structures which undermine the internal functions of sovereign countries in return for trade agreements which just result in Chinese workers being sent and no locals getting jobs from the deals while operating expenses for farmers are driven up due to compliance criteria not imposed on Chinese producers.

 

Their PR skills are pretty much on a par with Jeffrey Dahmer.

 

So how can they swan around and convince people that because they have a lot of money that they're superior. My experience of China has been that the more money one of them has, the more of a vain delusional idiot he is.

 

If the Olympics introduced a most moronic idiot event much like Monty Python's "upper class twit of the year" I'll be thrilled to watch some of them compete against Jared Kushner and a couple of Saudi princes and sons of Russian oligarchs.

 

Neoliberalism has hit a really mad point. It's all got to fall apart sooner or later.

6 years 38 weeks ago in  Business & Jobs - China

 
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Emperor

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I haven't followed the news on Chinese property investment much but from what I understand it's as you say, when Zhou Bloggs has a crapload of money that he can't account for if asked and he obviously doesn't want to lose it it makes sense to buy property in a politically stable country with the rule of law operating.

 

It's also probably seen as a safer place to invest and grow your money than China. What are the options in China? Dodgy property developers, dodgy businesses and a rigged and corrupt share market.

 

I think a lot of it is probably a case lemming behaviour too. When one high flier does it everyone rushes to follow him and before you know it anyone who is trying to be someone (and have face) has a house sitting empty in Auckland or Tauranga.

 

 

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6 years 38 weeks ago
 
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Emperor

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I haven't followed the news on Chinese property investment much but from what I understand it's as you say, when Zhou Bloggs has a crapload of money that he can't account for if asked and he obviously doesn't want to lose it it makes sense to buy property in a politically stable country with the rule of law operating.

 

It's also probably seen as a safer place to invest and grow your money than China. What are the options in China? Dodgy property developers, dodgy businesses and a rigged and corrupt share market.

 

I think a lot of it is probably a case lemming behaviour too. When one high flier does it everyone rushes to follow him and before you know it anyone who is trying to be someone (and have face) has a house sitting empty in Auckland or Tauranga.

 

 

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6 years 38 weeks ago
 
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Shifu

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Simple answer, they want your land. Guess how many wars in the history of mankind come from that?

 

Haier is a sensitive word. You also know what it really stands for, right? First paragrapgh, Zhang Ruimin's background. Also notice the founding year, 1984, the exact timeframe when PRC opens up..... http://www.haier.net/en/about_haier/Leadership/introduction/

 

You are on the right track and doing the right thing to protect your country. Bravo. Yeap, Shipley sold her soul and New Zealand, the same way many leaders of developed countries did. To avoid going to jail from taking bribes take the money after you retire is standard high ranking civil servants corruption protocol.  

 

Kiwis still have hope; with you among them.

 

Stiggs:

When you say "they want your land", who is it you mean by they?

 

The Chinese government? Big business? Individual citizens?

 

I don't think it's anything organized and sinister, as in go and take people's land as some sort of domination plan or anything like that, I just think there are a LOT of people looking to better their situation in life and they think they can do that by buying houses in other countries. There is no concern for other people or their own country, it's just look after yourself and your family.

6 years 38 weeks ago
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earthizen:

They is in response to the title, ie mainlanders as a group. The answer is still the same, they want the land. A further question is, for what. From a country's level, represented by its leaders, the considerations can be different than ordinary citizens. With PRC, you need to be aware of their tactics of invasion, Tibet and Xinjiang are good examples. 

6 years 38 weeks ago
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Stiggs:

Ah, ok you answered my question there.

 

I really don't think this is anything to do with the Chinese Govt. or any sort of invasion scenario. In fact the govt has been trying to make it harder for people to get money out of the country to buy up land overseas.

 

This is just individual people acting on their own, not as a group and certainly not with any sort of group agenda .

6 years 38 weeks ago
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earthizen:

What you are describing is a normal, healthy type of immigration. However, we all know how normal and healthy mainlanders as a group, from top to bottom is.  Do they respect other cultures, are they civilized and honest?  Nothing sinister? Look at the hidden agenda of Confucius Institutes. Why do you think they are being kicked out?  This is not guesswork, their deeds (at least some of) are caught.

 

Even the locals know these invasion tactics, they are no secrets to them. I doubt if any daluren doesn't know about them.  You can ask around. They call it 'han-ize', pronounce as han hua. The hidden agenda is to invade and obliterate the local culture.

 

Ask the Canadians in Vancouver what dalu immigrants are doing there, and why they are so fed up leading to their public protests. No, not because they shit on the streets.

 

For decades plenty of Taiwanese, HKers, Singaporean chinese.....etc. migrate to Vancouver, ever heard of Canadians being disgusted by them, to the level of staging public protests (youtube videos, plenty). Ever wonder why? Ever heard of Taiwanese, HKers, Singaporeans being called brainwashed zombies? I haven't.  

6 years 38 weeks ago
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earthizen:

cont'd   Sorry, got to attend to something.  ' In fact the govt has been trying to make it harder for people to get money out of the country to buy up land overseas.'

 

This is an important point. CCP always use double talk. You can call this the Yin Yang talk if you like.  Always double standards.  In this case, to cover up some ulterior motive, e.g. so they get to buy the land (ie no competition).  

6 years 38 weeks ago
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RandomGuy:

What's the point in owning so much land in a foreign country when it can simply be nationalized in a blink and there is nothing China or Chinese could do about it. Think Argentina that nationalized every foreign owned real estate and companies shares, nothing the rest of the world could do about it but stomp their foot and make empty threats. My guess is these Chinese, 99% of them being deeply related to the CCP, the 0.1% top, not your average Zhou out here, are just trying to move their assets out of China due to the witch hunt happening now and the unforeseeable nature of a government that has taken everything from their people mot once but twice since it came to power.

6 years 38 weeks ago
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Stiggs:

RandomGuy, I guess they think there isn't much chance of their houses being nationalized in a developed country with a stable political system and that there's more chance of it happening (again) in China.

6 years 38 weeks ago
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earthizen:

@randomguy  Yup, of all people, communists for sure know everything there is about nationalisation, including how to use twisted arguments to incite the mass, gain power, control the mass, shed the blood of the rich and the intellectuals (ie those who can actually think using their own brain), screw the zombies, get rich, spread the disease worldwide. To see how the masters of nationalisation play the game in other countries, please see my response to loudvillager below.

 

@stiggs    Yup, that for sure is one of their prime concern, they know what their country is run on/by, one thing for sure,  it is NOT law.  You ever heard of anyone in prc talked about judicial independence and its significance, let alone understood what it was?

6 years 38 weeks ago
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6 years 38 weeks ago
 
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Governor

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What I'm curious about is what these people actually do once they've moved the cash into the asset. Here's what's fascinating to me. In Auckland, the average dwelling now costs around $1.2 NZ dollars. That's just under a million US. I was born in 1984, right when neoliberal reforms were first implemented. Many people throughout the country bought houses for anywhere between $45,000 to $75,000 that year and the average hourly wage was $5.45. Today the average hourly wage is $19 and the average house is $750,000. Some analysts have made a comparison where the average house was once the equivalent of four years salary, and now they say it's changed to thirteen years' salary. In Auckland where all the foreign buyers rush in, the stats are skewered to this level. The right wing political parties all claim it's market forces due to tech entrepreneurs doing stuff that the rest of us mere mortals can't comprehend. It's really just money laundering and it's quite simple to notice this. How many New Zealand designed software programs and apps are you currently using? The moment NZ does anything of significance, the media trumpets it like it'll go out of fashion and be forgotten the next day.

 

So put yourselves in the shoes of these Chinese buyers for a minute and help me to try to understand why they bother. Once they have this house, they've got to go back to China. The property I'm referring to had five owners, each of whom possibly has at least 5 ID cards and a few other nefarious ways of getting his or her cash out of China. Maybe a USB flashdrive filled with bitcoins shoved up his bum? Who knows..?

 

What do they do with the house? Just leave it empty? Then that means they spent their lives laundering and living by the sword in some autarchic, machiavellian, backstabbing dime store frankenstein version of game of thrones just to buy something which back when a western country was run properly was only worth four average annual salaries and they don't even have a means of living in it, and are probably incapable of functioning in a country which doesn't operate using systemic nepotism, corruption, incompetence and laziness being cast upon subordinates while you run off with all the cash. None of them could even hold down a job at McDonalds.

 

So why do they want the house? If the prices go down, they'll really struggle to sell it and there are no fundamentals justifying the rise and continued level of house prices as they currently sit. House sales are slowing down worldwide which is an ominous sign and would deter me from buying property pretty much anywhere.

 

If I had their capital I wouldn't do what they do. Are they just thick or is this the absolute last resort for a rational actor with no alternatives?

 

Have a look at this video and give me an idea of how long you think this type of situation can be sustained for. Apologies to those of you without VPNs.

 

https://www.youtube.com/watch?v=MmmiVX8-f8M

 

This is the story I refer to if you need a visual fix on the type of person who I'm tying to understand.

 

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1188...

earthizen:

Sold, NZ 980,000!  (video)

 

For what?  For daluren

 

1. Investment diversification. Don't put all your eggs in one basket, especially when they come from filthy farms with no light switches.

 

2. Rent the properties out, let the tenants 'work' for you, soon you really own the house (a mortgaged house is not really your house, the bank has legal rights to it).

 

3. Corruption gift. Offshore corruption, bribing someone with a house in heavenly New Zealand, a nice 'gift' indeed.  Not easy to trace. Hell, expoit those weaklings' legal loopholes, like those moronic protection of privacy stuff, to the hilt. You have to be a fool not to! 

 

4.  For kid(s), who they plan to send to NZ in the near future. 

 

5.  For retirement. Continue grabbing as many eggs from the prc filthy farm, retirement comes, get there through investment class immigration. It the kid has already infiltrated NZ by attending university there, and managed to stay behind somehow (seduce some greedy kiwi girl with a big red packet, everyone has a price, fake marriage route), who gives a shit, then go the family reunion route, costs a lot less than going through the investment category.

 

CCP and their cartel.  An even grandier hidden agenda. The real china dream this time.  Buy kiwiland, key businesses, bribe their leaders, jerk up land prices, control kiwiland in the shadow, screw the kiwis the same way you screw the cockroaches and ants in that biggest shithole in Asia.  Send kids there first, join them later and not only live like a king there, but actually the real king, the real controllers of NZ.  Do the same with all developed countries, han-ize the globe. One road one belt, out of that and underneath, branch out and screw whatever and whoever daluren comes into contact with.

 

Ever watched the Aliens SF sequel?  Go tell the genuine, local Tibetans who probably have never heard of the movie the gist of Alien, see if they immediately understand what you are talking about, even more than you?

 

6 years 38 weeks ago
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Englteachted:

Taking houses off the market increases the bubble, houses are built in order to compensate firther increasing the bubble. Make China angry, they tank your economy

6 years 38 weeks ago
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earthizen:

Take off the houses from mainlanders' hands by imposing 2X, 3X times surcharge on their purchase, the same way you charge foreign students a lot more tuition fee. If that doesn't stop them, ban them altogether. 

6 years 38 weeks ago
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loudvillager:

@earthizen.

 

They're charged five times, but there's a problem with this assumption because there's some information a lot of people aren't aware of. New Zealand is very deeply in the thralls of an ideology which says that private companies have specialist knowledge and can do anything. This includes elder care, which is dominated by three large Australian owned corporations which in reality simply collude with each other, but collect fees from the government to provide and manage the services of people who are in the end provided with "free" care. It's an unnecessarily high amount of taxpayer money being given to a corporation, but because NZ citizens get care for free, then they don't think about how much the country's being charged because they don't see or directly feel the impacts of that money being paid directly to the corporations out of the national budget.

 

The same is the case with the universities. A New Zealand or Australian citizen will only have to pay about 35 - 40,000 NZ dollars for a nursing degree, for example whereas an international student will have to pay 200,000. I've always wondered why anyone thinks the opportunity cost of that is worthwhile considering wages for nurses, but that's face distorting rational purchasing decisions for you, I suppose.

 

NZ and Australian students are actually charged the same figure as international students, it's just that the government pays an outright subsidy to the university for domestic and Australian students, so the university gets the international price regardless of where the student is from, and again, because the students don't see that money and they're taking out a student loan which they won't pay off until they graduate, they can't see how much it costs the country.

 

Now you can see why universities don't give a shit if foreign students speak English like a 12 year old. In the end, the NZ citizens are paying huge amounts to run this corporate racket, but employers now notice. If you want a job in business or construction, the best thing you can do to demonstrate your competence to employers is to get a job as a labourer and take night school or online classes. So many people have been complaining about the quality of graduates recently. So degrees, which used to be free and were only available for the best students to study, are now devalued in employment prospect terms and driven up in monetary terms. Why? Because they're only after profits. Bums on seats.

 

And then they try to tell us that it's a growth industry and that the country needs the foreign students or else we'll go broke. They're a net loss to most people in the same way the Olympics coming to your town will be for you. Only vendors, hoteliers and real estate agents benefit from this sort of racket and everyone else bears the costs.

 

There's a lot I've been working on with regard to dealing with these problems. The mainlanders mentality is that we're just a capitalist country to exploit. I'm no commie, but there's just no way we can let non residents come in to house flip and horse trade land while giving certificates to their gormless offspring simply for maintaining a body temperature in the high thirties. That's when capitalism has just become a parody of itself.

 

NZ was the pioneer model for neoliberal reforms in 1984 because of its size. It should be a test case for the new model we all need across the west now because the English central bank has been running negative interest rates for 2 years now.

 

That fact should set off a brainwave in most theoretical and critical minded economists. There's a new system that can be implemented, but it will be radically different and these nongs with their big reams of paedophile mugshots will be left burning assignats soon enough.

6 years 38 weeks ago
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loudvillager:

@ted

 

I think they see it as leverage too, but they've discounted the potential for the market to crash or even face a downturn. NZ's housing market goes through these. I remember through the 90s and early 2000s the value of homes would go up and down. Aussie and NZ's property lobbyists and guild are the greediest scumbags on the planet.

 

When it was found that many contractors in the mid 90s had built a lot of homes which required repairs for leaks and drafts and that the companies which built them had liquidated and scarpered to Australia and started new trading entities, the property lobby started a bunch of TV shows showing how people could go out and buy lots of timber, drywall and paint and do a bit of DIY to get huge capital gains on the value of their home. This set off a frenzy. In NZ there's no capital gains tax and no death duties.

 

This is because the country's actually got quite low wages, but it used to be a cheap place to live and it was easy to get a job which allowed you to pay for whatever you needed. Plus inequality was low. But it wasn't socialist. It was Keynesian and had lots of state regulation, ownership and control. But there were no homeless people and only a bit of crime, but nothing like today.

 

Things are a bit of a disaster, but what gives me hope is that the younger people here aren't hopeless like the Chinese are. They don't just sit there and let things happen to them and they aren't just consumers.

 

There are things about owning property in the country that these calculating parasites haven't factored in. Also I know their herdlike mentality. If prices do start to fall things are going to become interesting very quickly. They'll be falling over each other to flog their stuff off before the price drops too much.

 

I'm hoping I can convey this knowledge of the mentality of these people to the political class in the country who aren't already bought off by them. There are plenty of weaknesses in their strategy and I know in the long run that they will have to recede back because in terms of fundamentals, they ain't got nothin'.

6 years 38 weeks ago
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6 years 38 weeks ago
 
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Shifu

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They are spreading like a plague of locusts all around the globe. They are using their ill-gotten gains buying up the US, and I've long since given up on the thought of retiring there. I thought the Philippines might be safe from them, but I saw that they are building gated communities all over the most desirable regions. There is no escaping them. They are the Borg and resistance is futile. Unlike the Borg, they don't want us to assimilate into the Han collective, but rather be subjugated by it. The sinicization of the world will be complete in 30 years.

loudvillager:

I was anticipating this sentiment coming up because I wanted to ask some further questions given that people were saying exactly this in the 1970s and 1980s about Japan. People thought the Japanese would take over everything and they were unstoppable tech wizards. Now I just think of them as weirdos who sit in offices all day when there's no work needing to be done so they can pretend to be hard workers at a family reunion and devising all sorts of silly and unnecessary rules.

 

China seems to be on the same path. I think this housing idiocy will implode, and like Japan, they'll become nothing except the Japanese government and political system could handle a crash. It's not like these rentier capital gains accumulating house flippers can pick up and start all over again like Robinson Crusoe. I hope they'll at least sell off the western liberal democracy stock and downgrade to some gated compound once their influence recedes.

 

People around the world are fed up with them and are finally beginning to say so. I always said it's better to turn down the money and preserve your lifestyle. People are starting to take heed retrospectively. I get a feeling it will all be fine in the long run, but the lesson we need to take on is that you can't sell key infrastructure like education and housing. Those are costs and investments, not profit generators. I hope we've learned from this.

6 years 38 weeks ago
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earthizen:

@Quinn68    Yup, locusts and given their nature, they also behave like cancer cells.

 

@loudvillager   Mainlanders are very different from the Japanese who also bought many properties in Hawaii decades ago, ie in their hay days.  

 

When Japan went to war in WII, the war damages were done in OTHER asian countries. During WWII, no other nation trashed Japanese civilians. Sure as a country they lost WWII, short of Hiroshima and Nagasaki, the majority of civilians were left untouched. Also, Japan welcomed and learnt from the West as early as the Meiji era, started wearing western suits while chinese had pigtails.

 

China was a completely different story, from the Opium War to WII, the score was deep, so was the desire for revenge. The devil is truly in the details in this case.  A lookalike misdiagnosis is very costly.

6 years 38 weeks ago
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Shifu

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Another useful thread in understanding the issues you are dealing with, china mainlander's mindset. Tip of the iceberg but at least you can see it.  Do feel free to share your (this) thread with those who are ignorant of what they are dealing with. In short, who is knocking on kiwis' door. Many names he has in many religious books.....

http://answers.echinacities.com/question/when-you-get-caught-streets-china-use-your-born-weapon?logout=f&showid=334345

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A:  "... through ..."?  Only "through" comes to mind is "S
A: "... through ..."?  Only "through" comes to mind is "Shenzhen agent can connect you with an employer, who's authorized to hire waigouren ... and can sponsor Z visa." It's not like every 10th person you meet in Shenzhen's hood can sponsor work visa ...  The only way to change from student to labourer visa is just a regular way by: 1. Finding an employer, who'll apply for an Invitation letter; 2. Exit China and apply for Z visa in your home country's Chinese embassy; 3. Enter China in 30-days after Z visa was stamped into your travelling instrument ...As I am aware, you won't be able to switch to Working permit by remaining in China....,so make ready for a return to your home .... -- icnif77