Polity: A week on from the housing controversy
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/Rob Salmond.
For Labour, the distinction was always about speculation from *offshore* Chinese
He only ever pitted *offshore* Chinese
Our discussion last week focused on Chinese
No, Labour never used "Chinese" of mean "foreign."
1: You forgot "offshore" sometimes, in your reactionary stuff there.
2: But you did use it to mean "bad", when combined with "offshore".First, we never used ethnicity as a proxy for nationality. Never.
You used people's names, common to their ethnicity, and then compared that with local demographics to hang shit on Chinese nationals. That is using ethnicity as a proxy for nationality, you clown. Stop digging, Rob.
Makes very explicit the distinction between "Chinese NZers" on the one hand, and "foreign money" on the other.
No, Rob. "Chinese money". You're not worried about Chinese kiwis, just the Chinese. Not anyone else, just the Chinese. Chinese, is what you're worried about, and think everyone else should worry about, because they're Chinese, but not Chinese kiwis. Very important distinction, not at all racist, you're just really worried about the Chinese.
Nobody should read anything in our data analysis as being critical of Kiwis who happen to have Chinese ethnicity.
Indeed, you're really attacking the Chinese. That couldn't possibly be racism and it's such a clear distinction: Chinese bad, Chinese kiwis good. Really, they should just all change their names to something European and this problem would all go away. Then we could get on with hating the right kind of Chinese, couldn't we Rob.
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/Russel Brown.
there is an issue of historic proportions looming with respect to Chinese capital outflows
Really? Is that ... extrapolation? Or just ... random ass-pulls.
Because I recall there being an issue of Belgian dentists, or Japanese widows, or Dutch dairy farmers, or bankers from Sydney, or ... let's say, everyone in NZ who isn't Māori. I mean, if you wanted to talk about historic proportions of capital flows, there'd be an interesting place to start, surely, the ten of trillions of dollars in capital stolen from Māori by imperial conquest, that we're all disturbed about now because it's not Europeans stealing it all, it's just normal and lawful everyday commerce with the CHINESE!!!!!* ... you know Kiwis are buying a bunch of stuff in China, too, right?
And not at all, say, "people whose names sound Chinese". Which is historically associated with some really nasty racist stuff in this country's history, but isn't what is happening here, even though it obviously is.
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The facts driving this conversation include our distrust of the human-rights-abusing Chinese government and the inability to buy Chinese property. China is ruled by a capitalist autocratic dictatorship, as is the USA ruled by a similarly corporation-ruled political duopoly. Our problem stems from the fact many of us distrust these countries’ political leanings. 20,000 locals murdered by the state last year in China’s case and more people imprisoned on the planet per capita in America’s, for example. Why would someone who believes in Chinese cultural supremacy treat us any different than Tibet? Who would trust someone who sincerely believes in the authoritarian actions of the Chinese government to be an empathetic absent-landlord neighbour? You watch Fox News and live in Texas but somehow I can trust you to step up when needed?
And let’s not go there about the Aussies, a few of whom are related to me. Did you see the anti and pro-racism debates that played out as riots today? Your new landlord could be either flavour, but it is quite likely that your Aussie landlord is a racist. That is the disconnect. Foreign landlords who don’t live here judge tenants within foreign parameters. There is a problem. My next landlord could be Donald Trump. I imagine he wouldn’t care about our property or understand our situation as well as even a John Key-fan would. They’d have a lot in common, but at least there’s a chance the kiwi landlord would be embarrassed if you pointed this out. Btw I haven’t mentioned the poms, because the Queen officially owns the country anyway, because no NZ government has had the balls to secede. UK landlords are born-to-rule.
There is an issue. -
And I should have pre-faced all of the above with, in my experience as a tenant. I have forged friendships with people from almost every country on the planet, but it doesn't mean I would trust their governments. At all.
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Kumara Republic, in reply to
Well, if you don’t consider:
- reinforcement of inequality by enriching those who got in early (or get out early) at the expense of the rest of the population
- enrichment of those with the good sense to inherit wealth at the expense of wage earners
- damage to the productive sector because real businesses are unable to compete with the returns from leveraged land speculation
- losses to those left with negative equity after the bubble bursts
- potential loss of banking services if a crash undermines the banking system
- cost to taxpayers of bailing out banking sector (remember, this is the alleged reason for austerity in Europe)
- loss of tax income as taxable earnings are replaced by tax-free capital gains
- damage to the environment from urban sprawl justified by a semi-imaginary need for more housing landNot to mention:
- damage to the economy of other countries (China, in particular) by the diversion of productive investment into offshore speculation
It's gotten to the point where a politico-economic cataclysm is the most likely thing to break the existing orthodoxy. It brings to mind how major tragedies can unexpectedly be a catalyst for meaningful change. Such as how the Chernobyl meltdown was the knockout blow for the Soviet Union, because it was far too big for the Politburo to cover up.
If there's only one good thing to come from an Auckland housing bubble burst, it'd be the potential discrediting of the Shock Doctrine dogma - so long as NZ takes the Icelandic approach if it did happen.
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Bernard Hickey goes mixed-metaphor-happy on the controversy.
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Jeff Weir, in reply to
Its not and never should be in the “dream” category of human activity. It is a necessity. Im pretty sure (I’m not a qualified naturalist) all land based mammals, yes we are just animals, need warmth and shelter. In the parlance of today, a home. This necessity has taken on grotesque forms.
C'mon...owning your own home is not a *necessity* of life. Even in nature, plenty of creatures effectively rent.
It's a necessity to have shelter, yes. It's not a necessity that you *own* the shelter though. I don't own my shelter, or any others. Every fortnight I purchase the right to live in a shelter owned by someone else. And for me, the cost of that 'right to occupy' is lower than the all-up cost of ownership, given the pretty meek rental I'm renting. So I bank some of the difference.
New Zealanders need to be made aware of a a broader dream called 'Financial Security' that isn't necessarily shackled to a dream called 'Home Ownership'
I have a kiwisaver account. It has some good cash in it. I have growing equity in a Term Deposit, too. I may elect to use these to buy a house - if I can afford it. I may not. If I can afford to buy a house, that may or may not improve my Financial Security dream outcome compared to leaving it in a Term Deposit/Kiwisaver and not signing up for a very large mortgage.
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Jeff Weir, in reply to
Bernard Hickey goes mixed-metaphor-happy on the controversy.
Treasury suggested it could be collected by Auckland Council, which could retain some tax to invest in infrastructure for new housing. That would at least stun two birds with one stone.
Hopefully not Kereru...
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Russell Brown, in reply to
/Russel Brown.
there is an issue of historic proportions looming with respect to Chinese capital outflows
Really? Is that … extrapolation? Or just … random ass-pulls.
I’m not in the mood for your rudeness, particularly given that you don’t seem to have even tried to read up on it. But here’s Liam Dann’s column from yesterday, which says much the same thing.
As Beijing-based Kiwi economist Rodney Jones has pointed out, China has nearly 60 trillion New Zealand dollars of capital to play with. in the past 12 months as much as NZ$650 billion has been invested outside of China. And this is just the start.
What has policy makers from Vancouver to Singapore talking about Chinese investment is the fact that the country has, until recently, had strict controls on investment outside its borders.
But it is the stated policy of the Communist party to relax these rules and balance the flow of capital in and out of China.
This is global, macro-economic stuff, on a historic scale.
We need to be looking at policy solutions to this issue to ensure that foreign capital – which we need – is not concentrated in areas that distort our economy.
Yes, that’s right, literally trillions of dollars, soon to be freed up and looking for places to go.
Mainland Chinese property investment in Australia doubled last year to more than $12 billion and there has been a global reaction in territories as diverse as Singapore, Hong Kong and the UK to try and protect domestic property markets from the flood of mainland Chinese money.
And that’s before the gates are even open. Given what’s happening with the two stock markets in China and the very low interest rates available at banks, there’s a very real prospect of a historic capital flight. The sums of money are unfathomably large.
A further complication is that some proportion of it is money whose owners are trying to hide it from the Chinese government:
Although few in the industry will openly discuss it, some acknowledge privately that fear among Chinese officials and businesspeople has been a big factor in the surge of investment into western real estate. The Chinese government has stepped up efforts to repatriate corrupt officials and recover offshore assets, including luxury foreign properties.
“The ongoing purge and the fear of losing everything if you are caught up in an anti-corruption investigation or a political fight has convinced many in China to diversify to places with clear and stable legal and political environments,” says one figure at a large property advisory company.
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For those who have trouble grasping what 60 trillion means, here is a graph of typical NZ monthly house sales (about 5 billion at the moment, on left) compared to 60 trillion (on right)
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Joe Wylie, in reply to
I have a kiwisaver account. It has some good cash in it. I have growing equity in a Term Deposit, too. I may elect to use these to buy a house - if I can afford it. I may not. If I can afford to buy a house, that may or may not improve my Financial Security dream outcome compared to leaving it in a Term Deposit/Kiwisaver and not signing up for a very large mortgage.
Presumably you have a bit of wiggle room time-wise, so all the best with that. Just the other day I asked someone who's approaching national super age what their plans were, as they'd dropped off the home ownership bus some years ago. With two different skill sets, one providing sporadic fixed-contract work in China and the other in NZ with the overhead of Auckland rentals, they half-jokingly replied that they'd probably "die in China".
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I have reflected overnight about the various reactions to my SST opinion piece, especially from those I named in that article.
First, and less important, Phil Quin protests that he never made any comparisons with the Rwandan genocide. I disagree with him, and I’m perfectly happy to point people to Phil’s original letter and let them make up their own minds about who’s playing cute word games and who isn’t. Here’s the link
More important were the reactions from Keith Ng and Tze Ming Mok. I made three references to Keith and Tze Ming in my piece (along with Chuan-Zheng Lee). In order:
First, I said:
After I published Labour’s method online, Keith Ng, Tze Ming Mok, and Chuan-Zheng Lee – all skilled analysts, all otherwise critical on this topic – all agreed the name-based ethnicity analysis was statistically sound, robust, and accurate.
On twitter yesterday, I pointed Keith to posts and tweets from each of them individually expressing support for the *method,* which was all I was discussing at that point in my article. (Link also to Storify stream I reference in my tweet
I understand Keith’s concerns with the *data*, although I don’t agree with him on that issue. But data and method are not the same thing, and I was discussing method alone. I think that is clear and unambiguous in the article. So I stand by this comment.
Second, I said:
Of course, they and others retained other criticisms of our work, relating to the steps after the main data analysis. I’ve engaged with them online through the last week, addressing their concerns and presenting additional data to support Labour’s conclusions.
Tze Ming’s criticism of this was that she, and others, did not accept the arguments I made last week when I was engaging with her and other critics. I agree with her on that, but never said that she had accepted anything. So I stand by this comment, too.
Third, I said:
Having said that, one group I think did not overreact – despite their strongly critical stance – was the New Zealand Chinese community, including Keith, Tze Ming, and Chuan-Zheng. Their criticism was less about Labour’s intentions, and more about the impact of these revelations on ethnically Chinese New Zealanders.
Here, I think I made a mistake. When I said “…less about Labour’s intentions, and more about the impact…” I was trying to compare this group’s reaction to the reaction of Phil Quin and others I had been discussing in the immediately preceding paragraphs. In my reading of the various reaction over the course of the week, that comparison is accurate.
Having said that, I accept in retrospect that my sentence can be construed in another way, to imply that members of the New Zealand Chinese community had few concerns about Labour’s intentions. That is untrue, as Keith and Tze Ming have pointed out.
I regret writing this sentence in an ambiguous manner.
(Posted on PA threads for both my piece and Keith’s, and notified to all four named parties via twitter.)
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BenWilson, in reply to
It seemed to me that you made a mistake in presuming a lot about the way Keith and Tze Ming were thinking, without consulting them directly on that. That would have been both more polite and more sensible. People are always going to react differently to hearing such a thing for the first time on an open blog post, rather than via private communication first.
Other than that, I'm pretty much sympathetic to what you did with this data. I'm not feeling the debate about racism at all. It should definitely happen somewhere and I'm not surprised a lot of it is happening here, but there's nothing new in any of it to me, whereas what you came out with was actually interesting to me, as yet another piece of evidence of a very serious social issue in NZ.
Naturally it's complicated by virtue of being strongly associated with a powerful political party.
I'm going to take my leave from any aspect of the debate that goes toward the racial conflict angle. I just don't feel it can or will go anywhere further. We all know how we feel about this, and I at least have a pretty good idea about how most other people feel. It would be nice (for me) if there were somewhere the debate could continue in which that angle is strictly avoided from the start as a premise for discussion.
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Katharine Moody, in reply to
if there were somewhere the debate could continue in which that angle is strictly avoided from the start as a premise for discussion.
I'd personally be really interested if PAS could approach David Hood to do a short piece presenting the information/data analysis he has done in considering offshore capital flows finding their way direct into our local residential housing market.
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Katharine Moody, in reply to
David, this data/analysis will be of interest to you;
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+1 to that Katherine. A discussion reset coming from other directions than just Rob's revelation of a week and a half ago would perhaps shed light on where/how this could have been done instead without getting bogged down in all the moral issues that surround this research. It could be very constructive. It could also free this thread and all others to go for broke on the racial conflict angle. I don't think they should stop at all, so long as people feel they're getting something out of it and they haven't degenerated to a racist shit fight, something we're in dire danger of here atm.
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I would note that even if Russell is interested in a walking through the numbers post, my things I am doing with my evenings is kinda full until Sunday. Which is a long time in internet disagreement years.
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Katharine Moody, in reply to
Which is a long time in internet disagreement years.
But which is a very short time in getting to understanding the crux of the matter years!
I've been concerned about what is driving this housing madness since about 2002.
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Other commentators, however, have demeaned themselves with cartoonish hyperbole. Phil Quin resigned his role as Labour’s resident fly-in-its-own-ointment while comparing the data release to the Rwandan genocide. That’s obviously absurd. Anyone repeating his claim showed the same lack of perspective.
You better believe I resent being categorised this way Rob. We're former colleagues and as such, you ought to know I judge you and the failure in properly presenting this debate by standards I know you're aware of.
I'm not a statistician (I leave that debate to those qualified to hold it). I'm interested in politics and message framing (that is my background) and I think this was framed in a way which was guaranteed a racist raection (I find that irresponsible, and unacceptable). To sit back and say, "we didn't do that, we're not responsible for those burnt in the fire we deliberately lit", is daft.
Conflating all non-ethnic Chinese objectors as you do in the quote above is a straw man of the silliest kind. I'm pleased to see Tze-Ming and Keith defend themselves, and I feel the need to do the same.
I find racism of any kind objectionable - I have a zero-tolerance for it. That's why I've objected, and why I've taken the actions (speech and financial) that I have. I don't believe I'm guilty of cartoonish hyperbole - I believe I'm defending principles that Labour seems to have walked away from.
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New Zealanders need to be made aware of a a broader dream called ‘Financial Security’ that isn’t necessarily shackled to a dream called ‘Home Ownership’
Ownership is a human thing much to our detriment. Financial security? whats that?
Some people are just never satisfied and their insecurities will drive them.Anyway my home is on wheels. So I'll bow out now. -
BenWilson, in reply to
It's also a lot to expect if there is only limited interest. You've been down the road before of cranking out solid numbers and people not really getting into it much. Where some less solid numbers provoke massive attention. I can't promise anything more than my own attention. Nowhere near as exciting as an ethno-political standoff, nowhere near as easy to form an opinion about, or to pick a side.
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For those who have trouble grasping what 60 trillion means, here is a graph of typical NZ monthly house sales (about 5 billion at the moment, on left) compared to 60 trillion (on right)
I’d be weary of going overboard with the scaremongering, compare it to NZ$650bn by all means.
Liam Dann can be quoted as saying:
China has nearly 60 trillion New Zealand dollars of capital to play with.
Rodney Jones’ actual quote was:Financial assets in China exceed Y245tn – or nearly 60 trillion New Zealand dollars. As China opens up, more of this capital is free to flow abroad. In the last 12 months, net capital outflow from China has reached as high NZ$650bn – or nearly three times New Zealand’s GDP
Previously it’s been a nightmare getting money out of China:
Apart from QDII, current rules allow Chinese residents to convert $50,000 worth of renminbi to foreign currency annually. In reality, investors have also exploited various loopholes to move money offshore, including disguising outbound financial flows as payments for imported goods.
Try buying an Auckland house with $50,000, this applies to everyone including Chinese students, New Zealand residents and New Zealand citizens. Foreigners in China are limited to transferring 500USD per day and only on nonconsecutive days.
QDII2 will start as a pilot programme in Shanghai, Tianjin, Chongqing, Wuhan, Shenzhen and Wenzhou, the official Securities Times reported this week. Individuals with net financial assets of at least Rmb1m ($161,000) will qualify for the programme, with total outbound investment limited to 50 per cent of the individual’s net assets.
[…]
Liang Hong, economist at China International Capital Corp, estimates that if the programme were expanded nationwide, it would theoretically free up about Rmb41tn in domestic wealth for overseas investment. But analysts caution that Chinese authorities, wary of unleashing uncontrolled outflows, are unlikely to scale the programme up that quickly.
China, as the world’s largest saver, has a major role to play in the global financial rebalancing toward emerging markets. Today, these countries represent 38 percent of worldwide GDP but account for just 7 percent of global foreign investment in equities and only 13 percent of global foreign lending.1 Their role seems poised to grow in the shifting postcrisis financial landscape, since the advanced economies face sluggish growth and sobering demographic trends. As a lead player in that shift, China could become a true global financier and, with some reform, establish the renminbi as a major international currency.
If we can’t provide the infrastructure to cope with Chinese real estate investment, I imagine it’s only a matter of time before they’ll be building it for us, and most probably at more competitive prices:
As the Chinese continue to expand their real estate holdings, construction companies are winning contracts for major projects in and around those sites. In 2010 alone, Chinese construction companies signed $1.04 billion worth of contracts with various U.S. business partners and completed $836 million worth of projects in multiple states.
If that hasn’t already begun.
Chinese company CNR Corporation has won a $29 million contract from KiwiRrail to build 300 new rail wagons.
Kiwirail says it turned to the overseas firm because New Zealand workshops were not competitve and could not complete the contract on time.
The horizontal illusion driving a lot of the hysteria seems to be that accommodation is an endangered resource. Butwith regards to Auckland real estate it’s plain to see that compared to China, New Zealand remains vertically challenged.
Comparisons with Hong Kong and Singapore are important, especially if you have a map handy, i.e. find them without a magnifying glass.
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chris, in reply to
Rates of Home Ownership
There is nothing revolutionary about this phenomena. Hopefully a name like John Holland sounds European enough to slip in under the radar. While Labour are plying their wares to old school New Zealand xenophobia, prodding people to zealandly ask “how can we restrict this?” the National Party are positively Chinese in their approach; clearly thinking; “how can we capitalise?”. It’s the distribution imbalance of said capital that the Labour of old would have focused on and you’re not, you’re turning your nose up at it. 中国欢迎你Little先生.
Must....stop...the....money....flowing in.
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Michael Roberts, in reply to
If the Auckland property market was flat, and promised no prospect for price rises, most speculators would not be interested in it. I don't think that one can blame the housing bubble on speculators, though of course they may be exacerbating an already existing problem.
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steve black, in reply to
...shed light on where/how this could have been done instead without getting bogged down in all the moral issues that surround this research.
Say you are interested in looking at what proportion of house purchasers are non resident.
If somebody came to me with a list of purchasers of houses and I could get names and addresses out of it, I wouldn't head for a computer and start classifying names as Chinese. I'd pick a random sample of names from the list and start contacting people and explain the research being undertaken. I can't remember if the original number of names on the list has been given, but for starters let's say pick a 10% random sample.
Do the usual research thing. Contact them and find out some things like their citizenship and residence status. Go ahead and ask ethnicity if you like. You could even ask them how many houses or apartments they own. And are they going to live in the one they purchased or is it an investment?
You then analyze your data to work out things like the proportions of purchasers who are residents vs non residents, citizens, investors. You now have measured the proper variables at the level of individual data. You could also look at the proportions of overseas resident purchasers who are in different categories of interest: Australian, American, Kiwis living abroad, Chinese.
Write these results up without resorting to sensational headlines and be very clear that this isn't an estimate of the total sampling universe (all sales). Just the proportions in the list.
This takes more effort than Rob put in. But I think it measures the right variables.
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