[jabbany]

> But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that.

So as an observer of this, you will see money coming out of one place, spread to many accounts, wired overseas to different recipients, then re-aggregated...

What do you think that looks like...? Surely not money laundering?

[maxglute]

Not on Canada's end, it's a bunch of people using legal capital controls to get money into Canada. On PRC end, it's evading capital controls, which depending on your geopolitical alignment, can be illegal activity. But if you're in the west, you want that Chinese money. Free money from competitotrs as good as brain drain from competitors.

[fennecbutt]

It's not free money if house prices are pumped and sold, profits then returned to China.

They used to try to overbuy milk powder in NZ, ignoring supermarket limits imposed bc NZ mothers couldn't find enough formula for their kids. Chinese buyers would sell it back to China to make a tidy profit, after their baby formula scandal drove demand for foreign baby formula (which still exists today). Worked at a supermarket at start of uni, got so fucking sick of being screamed at in mandarin bc I refuse to sell them 30 tins when the limit was 2. Over and over, every damn shift.

Source that isn't me: https://www.nzherald.co.nz/nz/china-buys-up-big-in-nz-baby-m...

[maxglute]

>profits then returned to China

Are those profits returning to China? If they wanted profit they would invest in Chine RE which (until recently) was much more profitable and speculative than western RE. Western RE investment was for capital flight to bring wealth abroad. Very few want to bring money INTO PRC.

Baby formula actually great example, at least from what I know in AU market. Yeah you had the occasional tourists bringing back a few cans to savec money, but the sellers getting 30 tins and doing weekly shippments to regular customers in PRC were getting paid in AUD. $60 per tin into AU economy flipping milk powder. It's a good gig, it's no real estate money though. You can argue it's net bad for society because some gain at society loss, but that's how it be in capitalism. Some interests profit at the cost of others. And the interests who profit from PRC money, arguably the establishment, wants to keep profitting.

[seanmcdirmid]

Capital controls have bad intentions anyways, I have no qualm with PRC citizens trying to avoid them. Not everyone in the west wants or likes Chinese money. It does lead to them basically exporting their bubble abroad, but Japan did the same in the 80s before their big bust.

[maxglute]

Yes, PRC citizens avoiding capital controls end up playing on the same field as other global wealth. I think PRC exporting their bubble is over stated - 10s of millions of tier1 buyers got into the speculation/RE game early in 90s that they'd be millionaires with wealth to enter western RE game regardless where PRC RE market stablizes. And there are just millions of millionaires in China, independant of wealth from RE bubble. Many buyers are simply independantly wealthy from other business ventures ontop of having multiple tier1 units to liquidate to buy western RE. The folks buying million+ dollar properties and 100k cars in the last few years didn't liquidate everything they have in PRC to start new life in Canada. Canada is a retirement plan they bought with change. Sure not everyone wants PRC money, but the sellers certainly do, as do the intermediates who benefits from PRC capital flight.

[jabbany]

Yup. Hence the capital control (less money leaking out means an easier recovery after the bust).

Of course, as is rational in capitalism, this just makes it even more urgent to skirt the capital control, lest you be caught with the burden of the bust. This was also why crypto was even an option for doing this, for a short while at least.