Ian Robertson links to this column by Jonathan Manthorpe in Facts and Opinions. In fact, the column is not so much about Vancouver’s self-image as the impact of the flow of Chinese money into the housing market – and our inability to deal with it.
Forget the verdict of a writer in The Economist that Vancouver is among the world’s most “mind-numbingly boring” cities. Immeasurably more important in recent years is the inability to address the seismic problem of money flooding in from China.
The most mind-numbing element of this story is the amount of money flooding out of China illegally. The numbers are obscene. Last week the major French bank, BNP Paribas, … concluded that in the first three months of 2015 over $80 billion had been spirited out of China illegally. This puts China’s wealthy on track to shuffle over $320 billion out of the country this year. …
The basic reason for the money flight is simple. After nearly 70 years in control, the Communist one-party state has almost exhausted its political legitimacy. … The flight of money from China suggests that very many people at the top of the regime have doubts about how much longer the Communist Party can hold power, and they are arranging safety nets for their assets and their families.
The flood of this money into Canada has not only contorted and distorted the Vancouver housing market beyond redemption, it has changed the sort of community Vancouver is going to be for generations to come. In a bizarre piece of absence of mind and lack of attention, it has also hitched the future of Vancouver to the fate of the Chinese Communist Party.
Vancouver’s low self-confidence and its destructive vanity have both played a part in these failures.
Lack of self-esteem has deterred Greater Vancouver from responding to warning signs about the money fleeing China. Part of this may be what a friend of mine calls “the Komagata Maru syndrome.” That is the fear of singling out any ethnically identifiable group for fear of being labelled a racist. Just look at the city’s media. It has taken it years to pluck up the courage to say that it is torrents of money from China that is distorting Vancouver’s economy.
Some people, most of them in Vancouver’s economic and political ruling class, have been unwilling to look critically at what is happening because they are doing so well out of it. … The municipal and British Columbia provincial government have also seen their revenues grow, making them reluctant to curb or even gather useful data on what is happening. Vancouver City Council is reported to make about $700 million a year on property transfers, and the province is making over $1 billion.
For the majority of Greater Vancouverites, shut out of the feeding frenzy, the effects are less wholesome. … Vancouverites face not only the emigration of their children to more affordable parts of Canada, but also the prospect of people performing what used to be thought of as middle income, but essential public service jobs, such as the police and teachers, having to move elsewhere.
Politicians and officials have allowed the economy, and especially the housing market, to become so distorted that it would now be dangerous to try to impose reality. It would not take much to trigger the kind of mortgage crisis that so devastated the United States economy in 2008-2009.
Obsessive vanity has played a destructive role in all this. Many people believe the hype that Vancouver is one of the most liveable and attractive metropoli in the world, so why would wealthy Chinese not flock to it?
Well, doubtless some are attracted by the geography. But a much greater draw is that Canada and British Columbia are open doors without gatekeepers or much in the way of rules or regulations impeding wealthy Chinese anxious to find a safe haven for their assets. Other favoured destinations with the rule of law and respect for private property, such as the U.S., Australia and much of Europe, impose stringent restrictions and requirements on foreign investors or property buyers. Canada, on the other hand, has no real idea of who owns what, and the planning departments of far too many of our municipalities are so amateurish and ill prepared that anything goes. And local politicians seldom push back against the energies of the property industry, much of which is often inexorably entwined with the elected officials anyway.
But an essential part of understanding what is happening in Greater Vancouver and, indeed, Toronto, is to look at what is happening in China. …
For those who can, there is every reason to get out of China. And the perfect landing spot is somewhere where the people don’t ask too many questions and are easily manipulated through flattery.