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Comment by murgindrag | Hacker News Reader

Or reciprocated.

Chinese citizens have invested a ton in US businesses, which is sort of okay. They also bought a ton of land in the US, which led to skyrocketing housing prices, and in the long term, if it continues unabated, will lead to the US paying tribute to China in the form of rents on US land. There is no upside to this. We got cheap Chinese plastic trinkets. They got our real estate. Didn't we do this to the indigenous people here once ourselves?

To be clear: I'm not opposed to being able to buy foreign land per se, but I am opposed to how one-sided this is. For the most part, US entities can't really own real estate in China (and even with Chinese entities, it's complex, but that's another story).

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Here in Australia, it's a giant issue too. There are plenty of houses which are Chinese-owned but unoccupied. They are effectively "banks" for storing cash. The scale is shocking, our "foreign ownership" figures for real estate are entirely skewed to this one country.

It's the same in Canada, too.

Similarly in Spain. In large cities like Madrid or Barcelona these guys are owning properties, running both small and large businesses and very often avoiding taxes (try to ask in one of small venues for a bill and be sure then to check it). Moreover, quite some properties are Chinese-owned winding up the rental prices for local population, which were already pumped up by popularity of short-term holiday rentals such as AirBnB. These have been pretty well known problems to local population, but nobody up is doing anything about it, since it is an easy and quick money.

I believe Switzerland has a relatively elegant solution for this: You get taxed on the expected rental income if the house is empty unless you can prove that you couldn't rent it out.

Same here in Vancouver.

> Didn't we do this to the indigenous people here once ourselves?

Not until they invade and slaughter everyone here. And no that's probably not going to happen. Hilarious that people think this way though.

sigh

This is among the dumbest arguments I've ever read on the Internet. I'm not sure if I'm not just being trolled, but it's like someone arguing Google didn't make Google Reader because they made Google Search. You can do more than one thing.

For reference:

http://newamsterdamhistorycenter.org/education/schaghen.html

Apologies. That's just what I thought of when the comparison with indigenous was brought up.

But that's not the only reason it's a bad comparison. When Manhattan was purchased there was no market. Chinese are buying things at market prices. Which I was taught are fair.

Rich chinese buying real estate in the United Stats has detrimental effect on the poor and the middle class, and our economy in general, leading to ossification.

Any rich person who buy more houses than he can live will create this problem. And there is no incentive for the government to do anything, because the real estate price is their tax, at least for the local government.

Incentive at scale is the problem. Incentives must taper off to make real estate / property investment less inviting the more is owned, this opening it up to more people at the lower levels.

But then will start the games of complicated / opaque business ownership structures allowing for individuals to own lots of real estate through different channels to make it look like it's separate entities.

And there is zero motivation from most of the world's leadership to clean up business ownership structure transparency because so many of them are ... participants.

Land is just an export like any other.

China produces lots of manufactured goods, and sells them to the US. The US produces tons of valuable urban real estate and exports it to China. (Similarly the US produces lots of higher education, and exports it in the form of international students)

Land can be viewed as an export, but it's not like any other.

Economically, there is a fundamental difference between finite, rent-generating resources like land, and value-added goods like Chinese trinkets or international students.

Exporting value-added goods builds the economy. Exporting rent-collecting resources results in significant long-term harm to the economy.

China and Singapore recognize the importance of land due to its inherent scarcity, hence most land is held by the state and foreign ownership banned or discouraged. Frankly, most countries should recognize the importance of keeping land ownership under domestic control. However, this prevents existing wealthy land owners from exiting their holdings easily by selling to the global market instead of just the domestic market, and money speaks loudly in politics.

Sorry, I should have consistently specified "urban" land. Urban land is not finite (cities grow) and is very high value-added.

American policy makers have chosen policies (eg zoning law) that make it easy to produce valuable urban residences. Now they have a massive competitive advantage in high-end residences, so of course they will become exporters.

> Urban land is not finite (cities grow)

“Capable of growth” and “not finite” are not the same thing.

I'm using 'finite' in the same colloquial sense as GP:

> there is a fundamental difference between finite, rent-generating resources like land, and value-added goods

But urban land is finite in every sense in which land is finite, so no matter what sense the poster was using it in regard to land, you are incorrect to say urban land is not finite.

One is a current account, one is a capital account. The US has been running a current account deficit, and the only way to sustain that is to have a capital account surplus, which means foreign investment.

https://en.wikipedia.org/wiki/Capital_account

Just like a business, a country can maintain short term losses by accepting outside investment, or debt. This is not necessarily a bad thing. Almost all companies take on debt and investment to fund their growth.

Also, just like a business, you can’t do this forever. At some point the debt comes due, and/or you end up selling the whole business.

Or to be the world's reserve currency. One of our major exports is dollars. We can keep running some level of deficit so long as that continues. With inflation, the world needs more and more dollars.

Outside investment in businesses is not a bad thing. Outside investment in land is.

> Land is just an export like any other.

i'm in the market for a few TEUs of US land, preferably downtown san francisco. i'll pick it up in Hamburg or Antwerp and would like a house on it.

sarcasm off - just no.

ask the residents of Vancouver, BC what they say about this

> We got cheap Chinese plastic trinkets.

No, what we got was a new robber baron class of ultra-rich billionaires the likes of which haven't been seen since the federal government had to break up Standard Oil, etc... Which has led to extreme wealth inequality and a complete lack of access to _our fucking politics_ for the vast majority of Americans.

We can get more than one thing. I mean, sure, you didn't write anything wrong, but how is that an argument against "We got cheap Chinese plastic trinkets?"

How is this even connected to the flow of the conversation?

Do you respond this way to everyhing? I can just imagine your household.

[Kids running in]: We got a pizza party at school!

[Parent]: No, what we got was a new robber baron class of ultra-rich billionaires the likes of which haven't been seen ...

> how is that an argument against "We got cheap Chinese plastic trinkets?"

It's not, you just read it that way.

> How is this even connected to the flow of the conversation?

One thing (outsourcing our manufacturing -> getting cheap Chinese shit in return) has clearly led to the other (the profits not trickling down through the economy -> our political parties becoming influence peddlers).

For some bizarre reason you seem really offended by what I wrote. I think that your comment says more about you than what you think it says about me. Have a good one.

>> how is that an argument against "We got cheap Chinese plastic trinkets?"

>It's not, you just read it that way.

Your comment literally started by saying "No." In English, that means you disagree with what I wrote. It's followed by a comma, where in a standard English construction you would present your counterargument.

> For some bizarre reason you seem really offended by what I wrote.

I wasn't offended at all. I was a little overwhelmed by the apparent stupidity of the non sequitur response (and I use 'apparent' very deliberately -- it's possible you miswrote what you meant, or I misread it). I think this summarizes my reaction best:

http://quotegeek.com/quotes-from-movies/billy-madison/1122/

https://www.youtube.com/watch?v=ZPXEdJ_Gtx0

Please don't cross into personal attack on HN.

https://news.ycombinator.com/newsguidelines.html

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