Comment by beisner | Hacker News Reader

Comment by beisner | Hacker News Reader

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The United States was once seen as uncultured, unrefined, and frankly quite weak by most of Western Europe until the late 1800's. And in many respects it was. Now the US is the richest country in the world, and is where wealthy non-Americans send their children and make land investments.

My point is that trajectory is more relevant to these discussions than current state of affairs. The quality of life of the average Chinese citizen (and more so the upper-middle class Chinese citizen) has increased DRAMATICALLY in the last 40 years. So when people talk about China's potential, they aren't talking about the situation in the next 5 or 10 years. They're talking about who is going exert massive international influence in the next 50 years. So you're right, most westerners aren't buying speculative property in Beijing (despite the fact that housing in central Beijing is nearly as expensive as New York City), but I'd wager there's a good chance of that changing in the next 50 years.

I think a missing piece of the puzzle is: It’s not clear to me that my property rights would be respected, should I be able to buy property in China (which, as a foreigner, I can’t do anyway, the government only leases it to you at best).

Western countries have a much better record in this regard.

While you’re technically correct about the government leasing property, in practice buying the rights to land for residential use is in practice effectively the same as buying the land. There are a lot of things like that in China, where the system is nominally socialist, but in practice things are just as capitalistic (if not more so) as they are in western countries.

This hasn’t been tested yet. There was a huge scandal in Wenzhou when the local government was going to charge market prices for renewing leases there (their property market started earlier with shorter leases before 70 years was settled on nationally). The central government had to step in and make the leases turn over automatically, because the precedent set in Wenzhou could tank markets nationwide.

I bet China eventually scraps the lease system and replaces it with a universal property tax, which would solve the other problem of keeping local governments funded long term (right now they just make money on sales), while naturally deprecating the property on a yearly basis, and also making pure speculation much more difficult.

But who can say. If china switches to a property tax system (not just the nominal one easily gamed in shanghai and chongqing today), it would break a lot of buying assumptions.

That’s well and good, but my point remains: There simply isn’t enough long run evidence of predictable outcomes.

I have some confidence of this if I purchase property in a Western jurisdiction, but in China the situation is a bit more fluid. I have zero leverage and have no doubt I would get trampled if convenient.

This is the perception they have to overcome, and to be honest, I don’t think they care to; do they really need or want my capital invested in China, especially in property?

Signals from ruling class appear to indicate otherwise.

Well, unless you include air pollution, then quality of life isn’t better, especially in Beijing.

Also, even if housing forsake prices in Beijing are at New York levels, rents are just at Wichita levels. No foreigner is going to buy into that level of crazy, especially when buying property in china accords them no residency benefits (they will never get hukou, heck, green cards basically don’t exist).

Permanent residency is available for investors and people employed there. You’re right, it’s not unconditional. Property rights, in practice, are generally respected as in western countries, although there are some notable counter examples.

I think pollution in China will likely be a non issue in 10-20 years or so. Pittsburg used to be like Beijing, but as the National economy shifted away from industries causing pollution, it disappeared entirely. China is in the midst of this process.

I lived and worked in china for 9 years and never came close to qualifying for a green card. Comparing Beijing today to Pittsburg 50 years ago doesn’t really help the current tech market where skilled people are moving out of Beijing for life quality of life reasons (e.g. they have kids who have developed asthma). You also have to pay talent much more to live in Beijing to offset its pollution problems (and to those who say it isn’t that bad, you haven’t lived through winter yet).

We were told in 2010 that the government would solve China’s pollution problem probably by 2015, 2020 at the latest. Ya, well, that isn’t going to come to pass.

interesting perspective, thanks

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