Tony Alexander

Economic Commentaries

Some Contributed Thoughts

Wednesday July 31st 2013

Why Chinese are shy,  and house buying.

I am a regular reader of your weekly newsletter.  This week I had a particular interest in your email correspondence with the Chinese journalist.

As a New Zealand citizen of Asian Chinese descent, I can shed light on why few Chinese persons provide a response within a public forum.  There are two main culture factors as follows:

Firstly, Chinese are brought up to be humble.  Obviously there are various degrees of humbleness between individuals.  Generally to speak in public about one’s money (wealth) is to be a crude show off.  It is also viewed to be an open invitation for attacks from the more jealous folks around you; or worse its announcing one is ripe as a potential victim for theft or as a rich target for kidnapping.

Secondly, Chinese tend to mind their own business as they value social harmony.  Unless it’s a potential/immediate harm to their family or close friends, other persons’ expressed viewpoints are “not our problem” and “Why invite trouble or disagreement if it doesn’t concern us?”  Western society tends to value individualism and appreciate a person’s ability to express an (original) opinion.

House Buying

“To list the reasons why Chinese buy NZ houses, particularly in Auckland, I would like to tell a number of stories/facts and leave anyone interested to draw their own conclusion:

An apartment, yes apartment (not a house which is something only a billionaire can afford in China), located at Xinhua Rd., Puxi (western Shanghai) was sold for RMB6,500.-/m2 in 2000 and the current price is around RMB50,000.-/m2.

An apartment located at Huamu Rd., Pudong (eastern Shanghai, east side of Huangpu River) was priced at RMB5,500.-/m2 and the current price is around RMB40,000.-/ m2.

A house of 300m2 plus small garden maximum 100m2, or villa we call in China, at Huamu Rd., next to the apartment above, cost about RMB30 million in 2000 and I have no idea what it might cost right now.

Last year a couple (Chinese wife and American husband) visited a site selling villas, in which any single one would cost more than RMB30 million, the sales just handed them over a brochure and did not bother to show them around due to huge demand. Another story is that pre-registration is needed for some sites so that the property developer can check the viewer can afford to buy the villa then they will be served for viewing.

An apartment of 180m2 located near Olympic Park in Beijing bought in 2010 with RMB3 million now worth RMB6 million.

An advertisement from an immigrant agency: If you own an apartment within 4th ring road in Beijing, which means your personal wealth is more than RMB3 million (about USD half million), then you are able to migrant to US under business category in which the visa only cost about USD50,000.-.

There are only three countries in the world currently running an immigration policy in which you can apply for a residency visa before you go to live in there (which is what I did in 2001): Australia, New Zealand and Canada.

One survey found out that 20% of private entrepreneurs have already had permanent residency of some developed country, mainly US, Canada, Australia or New Zealand, and 80% of the rest are considering migration.

There is a new Chinese term: Luoguan, or naked official, which means the official has sent everything, except him/herself, out to another country so he/she can run away once he/she smells something wrong with regard to his/her accumulated wealth.

One Chinese student would cost their parents around NZD25,000.-/year: 15,000.-+ for tuition fee plus 10,000.- living cost. Four years study, one last year for high school plus three years of university, would cost at least NZD100,000.-, or RMB half million. Second part of this kind of story is bit sad. I went to a SAAB dealer in Beijing in 2009 and found out both the receptionist and the sales graduated from Lincoln University. I would be surprised if their monthly salary is over RMB3,000.-/month.