Plan B for China's Wealthy: Moving to the U.S., Europe (2012) | Hacker News Reader

Plan B for China's Wealthy: Moving to the U.S., Europe (2012)

online.wsj.com

24 pointslxm45 comments

We should welcome them. To a significant extent, the "American Century" was the product of the U.S. benefiting from brain drain from dictatorships. We gained a lot of really bright Jewish folks during the WWII era for example.

We're missing a pretty big boat by not offering open refuge to any qualifying homosexuals from Russia and other nations where they're being persecuted.

How does one prove that they are homosexual?

How does one prove that they are of Jewish descent?

http://en.wikipedia.org/wiki/Who_is_a_Jew%3F#Judaism_test

Edit: More specific link

At some point you need to realize that American citizens deserve some sort of priority for the few jobs and services that are currently available.

I don't think I'm at that point. Not only is the birth lottery just another form of wealth disparity, but the economy is not a zero sum game. If we bring in rich and productive people they can create jobs as well as take jobs.

By doing so you kind of assure homosexuality will always be victimized in Russia (and other societies you apply this too).

LGBT people need to come out of closet in numbers and assert their existence. They did this in USA and Europe, they still have to do that in every society remaining. They're not getting their rights unless they show themself. That, and not the ticket to the USA for some of them and hatred for the rest of them, now for receiving that privilege too.

There is a big difference between persecuted Jewish intellectuals and corrupt Chinese officials. I'm generalising obviously but hopefully you see my point.

I understand that unless you live in an area that is undergoing this demographic transformation, it can be hard to see the difference.

I'm generally in favor of more open immigration policies, but your example is pretty distant from the one in the WSJ story. Jews fleeing Nazi persecution in the '30s and '40s were buying million-dollar homes when they arrived here. Frequently they barely made it out with the clothes on their backs. They were looking for a refuge, not a place to park wealth.

I find comparing situation of Jews in WW2 to the current situation of homosexuals in Russia tasteless.

I commonly hear the Chinese, Japanese or X nationality are buying up the housing in the United States with the emphasis of it being bad. Now, if we assume this to be true, is this necessarily a bad thing? The United States has been importing many things from China for a long time now. Wouldn't it be good to welcome the wealthy Chinese or Japanese to spend some of that money back into the US economy? I'm sure the scale of Chinese/Japanense buying american homes barely makes a dent in the amount we spend abroad for cheap labor but just a thought I had. Can anyone shed some light on my thoughts?

At least from what I understand about around Palo Alto (this may be incorrect), wealthy chinese buying up houses around the $1 million range in the area is part of what makes it difficult for Americans to compete for houses, especially since those wealthy chinese often do all cash transactions.

If that were true, Americans could simply vote for a local government that increased density allowing new units to be built.

Foreigners can't vote and therefore ultimately do not control that part of the process.

No, but they can just keep buying up a large share of the houses you build.

You probably can keeping building to a point where foreign investors begin to lose interest — but Americans do not generally like very dense housing, so this sort of becomes throwing out the baby with the bathwater. You're potentially making housing more affordable by turning the neighborhood into a ghetto.

That sounds great to me. Build a dense section of town and soak up obscene amounts of foreign money. I don't think super expensive apartments are the most likely to become a ghetto.

You get a chicken-egg effect. The already resident majority homeowners like the rising property values, so they have a built in incentive to be NIMBYs and block development. They also chose the city for it's specific characteristics and do not want it to change into something else.

Because in America, the interests of the wealthy never get more attention from government than the interests of the community at large.

When we were recently shopping for a house in palo alto and los altos, we heard about and competed against Chinese nationals. I don't know how many of these all-cash offers were capital flight or how many were simply people looking to buy a house. Many of these stories came across as anti-immigration racism, but it very much wasn't limited to the ~1m market.

All-cash just cuts down on transaction time.

As long as you're willing to offer a higher price, there's a monetary value the seller will accept in exchange for typical 30-day closing time required by lenders.

Opposing sentiment for this is usually seen in cities where the proportion of foreign real estate investment is significantly higher than the national level. For example, Toronto (or Vancouver) as a market has a much higher percentage of Asian owned real estate than Canada as a whole.

This laser focus on one specific area for investment raises the value of real estate in that area to out of reach for most of its native residents. This is where the "emphasis on it [foreign investment] being bad" comes from.

It's good for those who already own real estate, bad for those who want to.

This is a complaint in London too.

Whats missing is a sensible property tax scheme. Just tax the non-resident owners, who don't vote, at a much higher rate than city residents. Then use the extra money for great public infrastructure for people who do live in the city.

In the case of Vancouver, generally speaking they aren't non-resident or even non-citizens. Emigrating from China to get permanent residency and eventually citizenship for family members, along with a Western education and health care, goes along with buying one or more homes as part of what a friend who works in immigration calls "the full package". The net effect is a dramatic increase in inequality and skyrocketing house prices.

A partial solution has already happened: the cancellation of the immigrant investor program.

> Just tax the non-resident owners, who don't vote, at a much higher rate than city residents.

You don't even need to do a higher rate - they've likely bought their properties in nicer neighborhoods at higher prices, so the property tax revenue from the is higher anyways.

This really comes from ultra-low interest rates. Hike interest rates to 20% (US in 1980s had over 20% APR for mortgages) and see what happens with real estate prices then.

Foreigners influx has some influence but not as much as one might think.

I agree entirely. The influence of foreign money isn't that big when it comes to housing prices, even in the typical "foreign buyer" cities.

It's the sub 3% mortgage rates and 5% down special that are driving housing prices up.

Like you said, wait until interest rates hit even 6-7% and watch what happens to housing prices.

I don't even... Once our money is crypto, they won't be able to randomly change interest rates... I can't believe people actually ask for inflation. I guess you don't have any savings...

Property (specifically housing) is one of the most finite resources, and prices rise with demand. As the demand in Vancouver grows, the prices rise, and they continue to rise as high as the market will bear.

Unfortunately, when the market consists of Vancouverites making the average wage here, and also wealthy Chinese businesspeople with hundreds of millions to spend, that directly affects the market.

There is currently a condo development called Vancouver House being built in the densely-packed (for Canada) downtown core (which is also a peninsula, limiting growth and densification), which is being marketed specifically to the rich – so much so that when it was time to start shopping the properties around to buyers, the developers went straight to their target market: rich investors overseas, e.g. in Singapore and elsewhere. Even if you were an equally rich investor in Vancouver, they weren't offered here.

Vancouver House is, of course, absurd luxury, the kind that only the rich can afford to own (and maintain), and it makes sense; turn that plot of land into housing that the locals can (and are willing to) afford, and you're looking at selling for up to a million per unit. Gear the entire property towards the world's wealthy elite, and you can build units five times the size that will go for twenty times the price or more - and guarantee a higher class of owner, who will treat their property with respect (or, more likely, leave it empty for now).

Welcoming the absurdly wealthy into the economy without any checks or balances results in a rising cost of living without necessarily seeing a rise in the standard of living or in average wages. Property managers start doing renovictions (mass-evictions, allowed under local law if done for the purposes of renovating the building) so that they can upscale their clientele and double their prices. High-end shops crowd out the cheaper ones (Pacific Centre, the Vancouver mall with the highest revenue per square foot in Canada, started evicting the 'normal' stores like EB Games/Gamestop, as well as several shoe and clothing stores, in favour of high-end brands such as Victoria's Secret and Sephora).

Pushing people out of the downtown core will raise the value of the surrounding land, spurring further development. Prices there will rise, forcing those people further out, in a ripple effect. The further out you force the average Vancouverite, the more transit problems you have (as you're still dealing with the same number of transit users, but you have to provide better service in the suddenly-denser neighbourhoods as well as others), and the more traffic issues you have as more people need to drive further to get to work (which in turn causes problems for transit, etc.).

So, to answer your general question, yes, it can cause a significant problem if property developers devote all their energy to making more and more ridiculous luxury for the sole purposes of selling it to foreign investors who will leave them empty for years, while Vancouver already has rapidly rising housing prices that Vancouverites can barely afford, and when there's already a huge affordable housing crisis contributing to the city's homelessness.

Are they actually moving there though, or just speculatively investing in real-estate, and/or using it as a means to "off-shore" their wealth?

This year I'm thinking about leaving Russia rather heavily.

I was comfortable between peers, but now the political landscape is increasingly toxic, it gets worse all the time, and there are no solutions to any of our numerous problems. And everyone chooses to ignore reality and live in an invented world inside their TV set.

I think I'll do this in a year, starting with a large hiatus to travel the world, live in new places.

And then of course it will be Europe not the USA.

I thought that was Plan A.

And who says this is limited to China.

Is there a paywall-free version that can be shared?

Just type the title into google and the link that comes back will bypass the paywall.

You may need to delete cookies first or switch to incognito mode.

This is not limited to china. Same goes for countries like India where money cannot buy the things people eventually want - clean air, good roads, infrastructure.

(2012)

Thanks—missed that one.

Anybody want to figure out how to do this programmatically?

Where does one start? https://github.com/HackerNews/HN seems to be for issue tracking only.

Not sure I understand—HN isn't open-source (though an older version is), but you don't need HN source to work on this. Just figure out how to go from an article's url to the year the content first appeared! [1] That's the hard part. Inserting it into the HN title is of course trivial.

1. Or rather, the year it was last significantly updated.

Apparently, this is from 2012. Even then, it was horeshit even then I bet.

I know little about China. But I did live there in the summer of 2005 teaching in Nanning (the former industrial hub running south to Vietnam, not Nanning the tourist trap).

Others have described the phenomenon. Rich Chinese families would hire white kids as tokens; tutors who lived with their children to teach their offspring "real English." I was not an exception; I found even a few in the same city.

The family I lived with was one of the richer families in my region. I thought the father ran a mid-level pharam company. Then I visited the site/office. It was a huge. Then people pointed out ads for this company on national Chinese TV, and billboards in other region on a family trip in the next province over and way south in Beihai (is that what it's called, maybe HNers can remind of the most southern Chinese beach areas near Vietnam; I forget). I found out he was a moghul for one of the biggest emerging pharma companies in the region. Guy had a 7 series BWM with televisons built in, and a differenr Rolex for every day and a duplex penthouse apartment in the super wealth part of town.

So why all the background info? This guy visited America, when he saw me at lesst, twice after this in the following five years. They talked about moving to the US repeatedly (the reason my language tutoring was relevant at the time). But it never happened. Even by the time I was there, post-9/11 backlash had fucked many Chinese over. Visa restrictions made things a nuissance, and the wealthy grew sick of it. Some of the kids from other families even moved to Australia, the new it place, because at least "they were not American with their visa and residency regimes." The wife had been blacklisted for no reason at all; attorney friends had contacts at the US Embassy, and was told she was put on a list after the interview phase with a black mark like "do not approve residency visa bc this woman is shady." Why the meek wife (who was a stay at home mom her whole life) and no one else in the family is a mystery to me.

This dude could have opened up businesses to the tune of 500K bank deposits, according to my attorney dad, and naturalize very quickly, and the other lawyers who wanted to help and get an in to the business he would put out for them. He did not, and others did not either. The US had already become toxic. They invested in our economy, but they would even ask me to explain why we so were worth it economically to them, but the USG would routinely fuck around with rhetoric and policy clash with China. "We are your economic friends, why treat us like enemies?" (Obviously both sides are complete disallusionment with the other if they really believe this.)

So, none of those people moved. They invested all damn day in US and Western business, but only enough to get paid and avoided "the dream" of moving to the West as elites, being prestigious (as those to even have the opportunity).

Ironically, as a nation, we earned our devalution abroad. People will buy from us, but no one wants to be US (that is a joke, enjoy).

3,000 EB-5 petitions (invest $500k or $1M for green card) were approved in 2012, so you don't know what you're talking about.

http://www.uscis.gov/sites/default/files/USCIS/Outreach/Upco...

I never said I was an attorney. I was a stupid college kid and this is what I was told.

I stand by what I said. I knew lots of rich Chinese families. Despite what was said after (notice I said I talked to the one I lived with years later, so until about 2012), no one of them moved to the US or Europe. They discussed it often, and quite seriously. My point is that people want to believe the system will indulge them, the system will not.

But I will be a better immigration attorney next time.

> So, none of those people moved

China is a big place, there can be many rich people who do not move overseas, and also many who do.

Article should be flagged as "2012" in the title.

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