Chinese Hot Money Flows

Ed.'s note: What has become known as "China's hot money," almost $1 trillion of Chinese capital despite capital flight restrictions has left China for cities like Vancouver, Canada where it has caused a massive asset inflation in real estate. Real estate in Vancouver is heavily influenced by money from China which is why Vancouver is now the 4th most expensive housing market in North America and less affordable than Manhattan, New York. With a population of over one billion people, the Chinese are easily pricing out citizens in commonwealth countries with low populations and few large cities. Cities like Melbourne, Australia, Auckland, New Zealand and Vancouver, Canada have now reached a saturation point so the Chinese will now start branching out into America. Despite capital controls in place in China, hot money continues leaving for North America with target cities now looking to be Seattle, Houston and Orlando.

Race and real estate: how hot Chinese money is making Vancouver unlivable

Then we hear the nonsense of just let the free market work, so let's nip that one in the bud before it gets over used to China's advantage. The citizens in these commonwealth countries just named have to earn their money in highly regulated economic environments. Whereas the 1.4 billion Chinese operate under a completely different set of rules and framework. It is not a free market if only one group is playing by one set of rules, while the other group doesn't play by any rules at all. One group has worker's rights while the other group has feudal slaves to draw upon. One group has environmental laws, tax laws, insurance laws and the result of hot Chinese money is a few making massive profits in destination countries by creating massive asset bubbles. The local citizens hope of ever owning a home will disappear forever. And it is going to happen in Seattle, Houston and Orlando to start with.  Those who are profiting enormously from real estate sales will call anyone opposed to Chinese hot money as being racists. Even if you are Chinese pointing out the western problems of accepting Chinese hot money in the real estate market it doesn't matter. It is always about "white racism" one way or another.

Chinese cool on buying US properties

 

If you are overwhelmed by rising home prices in your neighborhood and object to this massive inflow of Chinese hot money, it follows then that it must be your problem because you are a "white racist." China's rapacious hot money is unavoidable as it seeks new territory where in some Asian countries it has become more popular than in some western nations. When this trade war started with China, housing sales plunged around 35% as Chinese buyers fled the market which might have been a temporary respite from Chinese hot money. Right now the Chinese are keen on property in Thailand especially thousands of wealthy Chinese millennials buying up condominiums there. A second favorite real estate market for wealthy Chinese is Japan where property there is going to astronomical prices in the lead up to the 2020 Summer Olympics. What this all means is the biggest real estate frenzy in history coming to a city near you because of Chinese hot money. Call the White House and tell President Trump you are not going to tolerate this and then put sell out real estate agents on notice. This has never worked in history. Not when you have a foreign wealthy elite buying up real estate in foreign countries despite racial or ethnic differences. It has never worked leading to all kinds of social friction and tension.

The Chinese inflating real estate prices and flooding markets with their hot money is in fact technically "playing by the rules" of receiving governments. We shouldn't necessarily blame the Chinese entirely. They are playing the long game and are extremely patient. Even though the PRC central government is trying to curb the massive flow of capital, this is still creating the world's biggest real estate bubble in history because of massive over lending. The problem lies with Chinese banks printing enormous sums of money and the Chinese are borrowing like there is no tomorrow. If there ever existed an ethnicity where gambling is seemingly an innate trait, it is the Chinese.  It literally is a wild west in China with their banks making access to so much money to 1.4 billion Chinese who then head to cities in foreign countries with populations for example of only 4 million in heavily regulated markets. Can readers see the coming financial and economic disaster with this scenario?

Western cities fighting back against Chinese real estate investments 

The country of Canada needs to secure a full extradition treaty with China to assist China's "Fox Hunt" program to track down dirty money Vancouver is awash in. Many well educated, extremely wealthy and savvy Chinese know their country is running on fumes and want to get their money and families out of China as soon as they can. China has the most speculative boom in real estate in history and is a formula for disaster. What is going to happen is that when China's real estate speculative boom comes crashing down, the US media as to be expected is going to blame President Trump due to his administration's trade war with China. It is intolerable that real estate in many cities has been weaponized against their citizens as just another asset class for Chinese hot money.

Billionaire: Chinese real estate is 'biggest bubble in history'

The solution is simple and needs to be implemented right now:

1) High taxation on purchase and repurchase of real estate within an allotted number of years.
2) Massive taxation on empty houses.
3) No more selling of US citizenships.
4) Tighter control on capital flows working with countries and in this case China.

The world is changing fast with China's population on the move all over the world with their hot money, China building deep water ports at critical locations and strategic resource extraction out of Africa. The economic mess the US and Europe currently find themselves in are in no shape to forestall what China's longterm plans have in store.

Chinese with their hot money getting a piece of their Canadian dream in Vancouver, Canada:

This house in Vancouver, Canada is a steal for only US$2,400,000.