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Federal issues often have roots that go well beyond Canada's borders

COMMUNITY COMMENT

One issue I have with federal politics is the extreme challenge the average citizen faces in forming a well-educated opinion. It is only by understanding the bigger picture that we are able to see the clear path forward. To illustrate this, we will explore a brief analysis of China’s housing crisis and its impact on Canada.

In 2018, 22 per cent of China’s urban housing stock was unoccupied; over 50 million empty homes. Despite Beijing’s best efforts, entire cities lie empty and speculation continues to drive up the cost of housing. While there are many reasons for this, it largely comes down to the complex system of incentives created by China’s totalitarian government, modern Chinese culture and the highly unstable economic environment produced by communism.

Generally, China’s central government dictates rules and guidelines which the cities and provinces operate under. One problem is that the central government receives the vast majority of tax revenue while cities and provinces are responsible for up to 80 per cent of expenses.

Municipal governments in China have few options as they cannot take out loans. However, like Delta, they are able to rezone agricultural land. Unlike Delta, they are able to buy cheap rural land, rezone it for development and then sell it at an exorbitant mark up to developers.

They are also able to establish state-owned companies which are “given” the land to develop. The result is a system of incentives in which land sales account for a huge portion of local government revenue, rampant development drives the economy, and entire cities of low-quality, mass produced investment housing lie empty.

Socially, China’s former one-child policy resulted in more than 30 million fewer women than men, creating fierce competition for marriage. In Chinese culture, a man is expected to own at least one property before marrying. Coupled with a culture that saves approximately 40 per cent of disposable income, cultural factors make home ownership a necessity while providing considerable opportunity for it.

The problem with saving is knowing where to put it, and endemic corruption makes the Chinese stock market and state-owned banks too unpredictable. Real estate is an investor’s best option, accounting for 70 per cent of Chinese household wealth. The kicker: land can only be leased from the government for 70 years.

Despite laws against it, it’s easy to see why billions of dollars flow into the North American housing market every year. All of this information is essential to understanding and solving housing speculation, vacancy taxes and foreign home ownership, but the average person cannot be expected to have this depth of knowledge on every topic.

This is why federal politics is difficult. With so many factors to consider, who is qualified to negotiate NAFTA and dance on the world stage? So, when voting in the upcoming election, look to your local candidates, their values and the people they surround themselves with. It truly is the best indication we have.

Community advocate Nicholas Wong ran as an independent candidate in Delta South in the 2017 provincial election. He finished second with more than 6,400 votes. He can be reached at mrnicholaswong@gmail.com.