This is a relatively big problem in Australia - there has been talk of a housing bubble in Australia for the last few years which in part has been propped up by Chinese grey money buying whole apartment buildings for investment, which drives up prices (they can just dictate prices) and keeps young locals out [1]. I cannot afford a house and I have a well-paying job.<p>The government looks the other way since building is one of the last big job creators now that the mining boom is over.
For example, there is a government body for foreign investment breaches (rules like you're not allowed to buy 'used' property if you don't have permanent residency, but I've personally talked to quite a few Chinese students whose parents did that for them) but it has never once initiated court action [2].<p>So everybody profits in the short term - Chinese corruption can move 'dead' money out of the country, Australian government gets to present itself as a job creator. Except young Australians, who have to rent and cannot rely on real estate property for their retirement.<p>In the long term, the bubble is going to pop and then you have dead cities with empty high rises falling apart (but then again, people have been saying for at least 10 years that the bubble is going to pop any day now and it's still inflating)<p>[1] Contains no numbers: <a href="http://www.smh.com.au/comment/grey-money-from-china-helps-blow-our-property-bubble-20140928-10n7a8.html" rel="nofollow">http://www.smh.com.au/comment/grey-money-from-china-helps-bl...</a><p>[2] <a href="http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enforcement-needs-to-be-strengthened/5921518" rel="nofollow">http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enf...</a>
In Australia we were supposed to have tranche 2 ("covering real estate agents, lawyers, accountants, car dealers and others") of the anti-money laundering regulations introduced over 10 years ago. As this article details, it is "comically" overdue:
<a href="http://www.smh.com.au/business/banking-and-finance/slated-antimoney-laundering-legislation-is-comically-overdue-20150913-gjlb7j.html" rel="nofollow">http://www.smh.com.au/business/banking-and-finance/slated-an...</a><p>While political parties can wallow in the extra taxes garnered from sky-rocketing real-estate prices and sizable party donations they have no incentive to introduce this second tranche.<p>For example, any party in power in New South Sales will keep its budget in the black simply from "stamp-duty" taxes collected on real-estate transactions.<p>The Foreign Investment Review Board was and is a farce and that's how the government likes it.
BC is by far and away the most impacted region. Let's list some quick housing prices examples:<p>NL - Amsterdam up 15% in 2016 [-1]<p>AU - Sydney up 17% over <i>5</i> years [0]<p>NZ - up 13% oct 2015-2016 [1]<p>BC - Metro Vancouver up 31.4% August 2015-2016 <i>alone</i>. BC (not just vancouver) housing prices have almost <i>tripled</i> since 2004. [2]<p>No, these new rules the BC government has put in place are not going to work. I've commented on the reasons before here:<p><a href="https://news.ycombinator.com/item?id=12873156" rel="nofollow">https://news.ycombinator.com/item?id=12873156</a><p><a href="https://news.ycombinator.com/item?id=12215490" rel="nofollow">https://news.ycombinator.com/item?id=12215490</a><p>[-1] <a href="http://www.globalpropertyguide.com/Europe/Netherlands/Price-History" rel="nofollow">http://www.globalpropertyguide.com/Europe/Netherlands/Price-...</a><p>[0] <a href="https://en.wikipedia.org/wiki/Australian_property_bubble" rel="nofollow">https://en.wikipedia.org/wiki/Australian_property_bubble</a><p>[1] <a href="https://www.bloomberg.com/news/articles/2016-11-02/the-rich-have-found-a-place-to-escape-the-horrors-of-the-world" rel="nofollow">https://www.bloomberg.com/news/articles/2016-11-02/the-rich-...</a><p>[2] <a href="http://www.cbc.ca/news/canada/british-columbia/26-slump-in-vancouver-real-estate-sales-called-a-return-to-historically-normal-levels-1.3745825?kkk" rel="nofollow">http://www.cbc.ca/news/canada/british-columbia/26-slump-in-v...</a>
In India, "grey income" is called "black money". It is a hot topic in India right now.<p>Recent activities on this:<p>Note ban (Nov 2016) => <a href="https://en.wikipedia.org/wiki/Indian_black_money#Ban_on_1000_currency_notes" rel="nofollow">https://en.wikipedia.org/wiki/Indian_black_money#Ban_on_1000...</a><p>Using analytics (today's news) => <a href="http://economictimes.indiatimes.com/news/economy/policy/i-t-department-scanning-data-pile-to-dig-out-unaccounted-income/articleshow/56282112.cms" rel="nofollow">http://economictimes.indiatimes.com/news/economy/policy/i-t-...</a>
Interesting point on the Vancouver angle:<p><pre><code> Q: In Canada, where does the money end up and why?
A: Vancouver is the preferred destination, by far, because of perceived
more relaxed anti-money laundering on-boarding compliance and more
importantly, easier access to better schools and lifestyle for children
of Chinese foreign nationals.</code></pre>
I wonder what ways US could prevent Chinese money buying real estate in the US?<p>1. Do what Vancouver did, add tax for foreign property ownership.
2. Tighten the checks on origin of money? How exactly, especially when it's coming as all cash? Maybe forcing it to go through a bank, where more thorough check is mandatory per IRS? But then again, banks are not the most trustworthy in this country.
3. Other ideas?
I study at Vancouver UBC and rented a room in a house in the nearby area. I could tell that the Canadian government has started to investigate the corrupted $ because one day a government official came to "my house" and asked the information about the previous landowner. It seemed that he used the corrupted $ to buy the real estate and make more $
Interesting about this on a per-capita basis. Is ~$2K per citizen a lot? I wonder what comparable #s for the US and Russia are.<p>(Note that with 16,000-18,000 people doing the moving, it's very large per intermediary)
Simple question: when some invests his corruption money in US, doesn't it automatically become "public" and hence traceable? For example, if you buy a house for X dollars in US then shouldn't Chinese government be able to easily trace you down? My understanding was that so called "black" money stays black only as long as you use it in form of cash, not investments.
And in a similar vein: <a href="https://news.ycombinator.com/item?id=13314967" rel="nofollow">https://news.ycombinator.com/item?id=13314967</a>
Wonder how this correlates with the current growth of the US economy, and maybe more relevantly, how the top 1% seems to be increasing its wealth much faster than the rest.
That's a big number, <i>way</i> too large for anyone to take personally in an emotional sense. But it's definitely big enough for a purge. Jailing, disappearances and more.<p>This is a pretty large economic tide. Almost twice the size of California's economy, all at once. Ranking it The Fifth Largest Economy, worldwide, if it's worth thinking in those terms.<p>Given that an approximate number of participating Chinese nationals have been enumerated, if they suddenly disappeared (and ~20,000 is certainly within the realm of possibility), what would a sudden halt of two trillion (legal or not) do to the rest of the world?