Chinese consul attacks Vancouver housing tax

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Looks like Vancouver genuinely is a new Chinese city, so much so that diplomatic tensions have erupted around a housing tax designed to help make houses affordable to locals, from Bloomberg:

China’s top envoy in British Columbia challenged the Canadian province’s new 15 percent tax on foreign home buyers, questioning the justification behind the hastily imposed measure.

“Why a 15 percent tax? Why now? Why this rate? What’s the purpose? Will it work?” Liu Fei, China’s consul general in Vancouver, said in an interview Thursday. “The issue is how to help young people afford housing,” she added. “I’m not sure even a 50 percent tax would solve the problem.”

…Liu said she has expressed qualms to some provincial ministers after receiving calls from distressed Chinese students locked in contracts to buy homes but unable to drum up the extra cash to pay the tax.

Liu said blaming high property prices on foreign buyers, especially Chinese, is unjustified. While Chinese nationals represent the biggest group of foreign home buyers, they comprise less than 3 percent of total transactions in the Vancouver region, according to government data.

“This is a big country with a small population,” Liu said. “It needs immigration to grow the economy.”

No, it doesn’t. Small countries all over the world do just fine without high immigration. I’m pretty BC sure doesn’t need overreaching Chinese diplomats telling it how to run policy, either.

There is a clear warning here for Australia’s major cities.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.