Chinese investment set to boom in New Zealand

[speights boy]

I think foreigner buyers should be only aloud to buy residential property which is new build or off the plan.
that would stimulate new build and increase supply.

Are you prepared to vote for a party with that as their policy, as your PRIMARY reason for choosing that party ?

[Wayne]

Are you prepared to vote for a party with that as their policy, as your PRIMARY reason for choosing that party ?

Only if they spelt allowed correctly

[Orkibi]

Are you prepared to vote for a party with that as their policy, as your PRIMARY reason for choosing that party ?

no that would be to shallow.

the point I'm making is that unless the government is going to restrict forginer buyer, complaining about the ever increasing pricess to a level that many Nzers can't afforded is a waist of time.
forgienrs are not the only factor as we all know it's the cyclical nature. But they don't help aether.

[speights boy]

They destroy our market!

the point I'm making is that unless the government is going to restrict foreigner buyer, complaining about the ever increasing prices to a level that many Nzers can't afforded is a waist of time.

I may have found a solution Orkibi.

Stop complaining, unless you are prepared to send a message to the Govt.
How exactly are you going to do that ?

[Orkibi]

It's a factual thing SB,
we get on with it, successfully investing and trading in Auckland.
This is a global event, check this out:
Chinese property investment through the roof: What it really means
http://www.news.com.au/finance/real-...property-investment-through-the-roof-what-it-really-means/story-fndban6l-1227348237828

Australia to crack down on foreign investors buying up property…

http://www.dailymail.co.uk/news/article-3064941/Australia-crack-foreign-investors-buying-property-revealed-Chinese-owner-buyer-forced-sell-one-Australias-expensive-mansions.html

[speights boy]

we get on with it, successfully investing and trading in Auckland.

Correct; and yet you write

They destroy our market!

So; which is it ?

[chrisgoh]

China to scrap loan-to-deposit ratio rule

BEIJING — China’s Cabinet will scrap a rule that caps lending by commercial banks at 75 per cent of their deposits, a measure that will increase the supply of cash in the financial system.


The law has been in place since 1995. The State Council will propose amending the banking law to make the limit a ratio used for reference rather than a regulatory statute, according to a statement posted on its website yesterday. A system will be set up to monitor the liquidity of banks based on the ratio, it added. Changes to the law need to be approved by the Standing Committee of the National People’s Congress.
Premier Li Keqiang is trying to reshape a state-run banking industry that has US$29 trillion (S$39 trillion) of assets, almost twice the amount of its United States counterpart. Deregulating interest rates and easing regulatory controls are part of his efforts to support long-term growth by giving markets a bigger role in the economy.


The shake-up is coming five years after the nation completed the stock market listings of the last of its dominant big four banks, including Industrial and Commercial Bank of China.


While the loan-to-deposit level for the industry was 66 per cent in March and the China Banking Regulatory Commission eased the requirement last year by changing the method of calculation, it still remains a constraint for some listed lenders. The Bank of Communications’ ratio was about 74 per cent in March, while China Construction Bank Corp’s was 72 per cent.


Mr Wu Xiaoling, a former central bank deputy governor, has argued that the ratio and state-imposed quotas for lending have undermined banks’ abilities to manage their assets and liabilities, and led to distortions such as the use of illegally obtained deposits to boost lending.


In November, Mr Li said the government would make the ratio more flexible, while the banking regulator said it was seeking to revise the banking law.


The central bank has sought to reduce some of the stresses in the financial system, with three reductions to the benchmark interest rate since November and two cuts in lenders’ reserve requirements this year.


BLOOMBERG (Source: Today)

[PTILoveYou]

This will be the start of a new bubble in China.

This will be probably the last chance my parents to cash up their properties in China (for mega profit of course).

[charlie82]

sounds like property stocks there and/or foreign stocks with property developments there are going to rocket too !?

[Damap]

You are missing the Chinese culture Orkibi completely.
They don;t really care what they pay. They will sit on the house, maybe rent it maybe not, and their kids will benefit. When you have grown up under a fiefdom culture you always think generationally. It would never cross their minds to subdivide, build and sell because then the asset and the wealth is gone.
Your and my thought is they pay too much. Their thought is in a hundred years this will have been a bargain, stupid white people, (foreign devils they call us), give away their property to us.

[PC]

Plus a falling NZ$.

All this coin looking for a home.
Perhaps they could fund all the infrastructure projects?
Buy a bridge. Own the railway tunnel. Buy HNZ. Be Auckland's Mayor.

Offer 3% return - way better than the current <1% they can get.

[speights boy]

You are missing the Chinese culture Orkibi completely.
They don;t really care what they pay.
...........
...........
Your and my thought is they pay too much. Their thought is in a hundred years this will have been a bargain, stupid white people, (foreign devils they call us), give away their property to us.

Slowly but surely I think more and more people are starting to understand this.

[PTILoveYou]

Plus a falling NZ$.

All this coin looking for a home.
Perhaps they could fund all the infrastructure projects?
Buy a bridge. Own the railway tunnel. Buy HNZ. Be Auckland's Mayor.

Offer 3% return - way better than the current <1% they can get.

Mortgage rate in China I heard is around 5%-5.5%, and savings rate maybe half of that.

But it is the speculation / big gains /greed that is driving Chinese people to 'invest' in shares/real estate.

[chrisgoh]

China’s Savers Are Set to Change the World

With $21 Trillion, China’s Savers Are Set to Change the World

Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.
With China’s leadership aiming to scale back the role of investment in the domestic economy, the nation’s surfeit of savings -- deposits currently stand at $21 trillion -- will increasingly need to be deployed overseas. That’s also becoming easier, as Premier Li Keqiang relaxes capital-flow regulations.
The consequences ultimately could rival the transformation wrought by the Communist nation’s fusion with the global trading system, capped by its 2001 World Trade Organization entry. That stage saw goods made cheaper across the world, boosting the purchasing power of low-income families at the cost of hollowed-out industries.

Some changes are easy to envision: watch out for Mao Zedong’s visage on banknotes as the yuan makes its way into more corners of the globe. China’s giant banks will increasingly dot New York, London and Tokyo skylines, joining U.S., European and Japanese names. Property prices from California to Sydney to Southeast Asia already have seen the influence of Chinese buying.

Other shifts are tougher to gauge. International investors including pension funds, which have had limited entry to China to date, will pour in, clouding how big a net money exporter China will be. Deutsche Bank AG is among those foreseeing mass net outflows, which could go to fund large-scale infrastructure, or stoke asset prices by depressing long-term borrowing costs.

‘Historic Proportions’


“This era will be marked by China shifting from a large net importer of capital to one of the world’s largest exporters of capital,” Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., the city’s stock market, wrote in a blog this month. Eventually, there will be “fund outflows of historic proportions, driven by China’s needs to deploy and diversify its national wealth to the global markets,” he wrote.

The continuing opening of China’s capital account will also promote the trading of commodities in yuan, and boost China’s ability to influence their prices, according to an analysis by Bloomberg Intelligence.
As was the case with China’s WTO entry, where many of the hurdles had been cleared in the years leading up to 2001, policy makers in Beijing have been easing restrictions on the currency, the flow of money and interest rates for years. What’s making 2015 notable is the International Monetary Fund’s once-in-five-year review of its basket of reserve currencies. China wants in, and is accelerating reforms to get there.

Offshore Centers

Recent steps to promote its currency have included setting up five offshore yuan centers, a new link between the Shanghai and Hong Kong stock exchanges and letting the tightly controlled yuan trade against the dollar in a wider band. It has promised to remove a cap on interest paid to savers.
“The integration of China –- the world’s second-largest economy with the highest saving rate but still a low per capita income -– into the global capital markets is an unprecedented event,” China International Capital Corp. economists led by Beijing-based Liang Hong wrote in a note this month.
There are already signs of that potential. Chinese buyers topped Canadians to rank as the biggest foreign purchasers of U.S. homes by sales and dollar volume in the year through March, accounting for more than a quarter of all international spending.

Moving Abroad

Lenders are speeding up their ambitions: Bank of Communications Co., China’s fifth-largest lender, is making its first overseas acquisition by buying a lender in Brazil, while China Construction Bank Corp. plans to open branches in Europe, Southeast Asia and Africa.
The global community is watching. U.S. Treasury Secretary Jacob L. Lew said after meetings this week between U.S. and Chinese officials that China is committed to pushing through necessary reforms to liberalize interest rates, open capital markets and open up more to foreign enterprises. The U.S. wants more access to the world’s second-biggest economy for its financial firms, something that’s been elusive since China’s WTO entry.

Few expect the yuan to soon threaten the dollar’s role as the global reserve currency, with a wave of domestic reforms needed first up to reassure international investors -- such as bolstering liquidity in the local bond market.

While U.S. policy makers are betting that a more open China will ease currency tensions between the two nations, any rapid depreciation in the yuan could trigger large-scale capital outflows, prompting intervention and new restrictions from China’s policy makers.

U.S. Friendly

“If they’re going to be gradually opening up to be like the U.S., then vast amounts of money are going to flow overseas,” said David Dollar, who served as U.S. Treasury attache in China and is now a senior fellow at the Brookings Institution in Washington. “I would speculate that it favors the U.S. over everything else.”

Other nations, from Argentina to South Korea, have suffered whiplash from volatile capital flows after they eased restrictions. While China is unlikely to tear down the barricades altogether, the opening of the nation’s capital borders will reverberate across the world.

“I don’t think you can find any significant economic system where deposits in the banking system are twice GDP,” said Nicholas Lardy, who has studied China for more than three decades and is a senior fellow at the Peterson Institute for International Economics. “That’s the potential.”

Source: Bloomberg

[Davo36]

One big source of funds from China is the inflated stock market, which may well come tumbling down soon.

Meet the world's biggest stock market bubble since the dot-com boom

Shanghai Duolun Industry, a Chinese real estate company, managed to win over investors with a little re-branding in May. In the midst of a technology stock boom, the company decided to change its name to "P2P Financial Information Services Co." The company didn't actually develop a peer-to-peer lending business -- it just bought the domain name www.p2p.com -- but its shares jumped 10 percent anyway.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11471709