Archive for category China
It’s been no surprise that Canada has long been in a housing bubble. Foreign investors from China have been buying up property in Canadian cities for years, and reselling them to Canadians for way more than the property is worth. China seems to be intentionally creating a housing bubble in Canada. What Chinese investors are doing is buying up property, and immediately reselling the property to the highest bidder even before the closing date of the first sale. This cycle can repeat as much as 3 or 4 times prior to the closing date of the first buyer, artificially driving up the costs of real estate property. There are signs that the artificially created housing bubble is about to burst.
Last month the Office of the Superintendent of Financial Institutions (Canada’s financial watchdog) stated that Canadian banks need to be stress tested against a 30% drop in housing prices, echoing concerns from the Bank of Canada in June. Last week Chinese media has been warning investors in that country to pull out of the Canadian real estate market, and is expecting a housing crash one that could rival or even be worse than the US housing market crash of 2008.
In 2010 the director of CSIS Richard Fadden warned Canadians in an interview with the CBC that the biggest risk to Canadian security wasn’t from terror groups but from foreign powers that are infiltrating Canadian politics and influencing public servants, fueling a growing concern about economic espionage. Little was done to correct the housing bubble by the Conservatives when they were in power. Little has been done by the Liberals either since they have taken control of the House of Commons last year. Vancouver recently passed laws to increase taxes on foreign real estate investors to help curb the growing concern regarding this artificially created bubble, however there are a lot of doubts whether or not it will work.
Why hasn’t anything been done to completely correct this bubble and warn off concerns of economic espionage? Governments of all levels seem to be cashing in on the taxes of these sales, that’s one reason. The other is because any major correction in the housing market could see that bubble burst with fears of major economic instability. This leaves Canada’s economic future purely in the hands of China, in which it seems they are now moving to burst this bubble intentionally by warning off that country’s investors.
Canada shed 31,200 full time jobs last month. While our prime minister is running around the country shirtless, there has been no word on what our federal government is doing to curb the current housing crisis it inherited from the Conservatives. As result of the current series of warnings and years of inaction, we could be in for a very rough ride ahead. Ontario will be hit particularity hard. A large segment of our population, and many businesses here in Ontario can’t even afford to keep the lights on. Gas rates set to rise as well. There also has been absolutely no word from the Ontario government on what they plan on doing to also head this expected downfall in housing prices, and economic instability as a result.
(Chinese President Xi Jinping and Russian President Vladimir Putin)
It takes 3 continents at war to declare another global war, and with recent developments over the past week it looks as though we may be heading in that direction. Europe is fighting a proxy war in Ukraine against Russia, NATO is fighting in the middle east, and now China is flexing its military might in the Asia Pacific Region installing surface-to-air missile systems in and around a disputed island in the South China Sea called Woody Island.
The move by China to install surface-to-air missile systems around this island is of particular interest since China and Taiwan both claim ownership of the island. There has been a lot of worry within the global community that China could actually invade Taiwan and/or neighboring countries, and the first step in doing so would be to take over this disputed island in the south China Sea (which happens to be strategically placed in one of the worlds busiest shipping lanes). The US has already dispatched naval assets to the region.
The importance of China moving in on this island is that China has long claimed Taiwan part of the Republic of China. Taiwan is a now an independent democratic state and a long time ally of the US in the region. While the middle-east has been a tinderbox of conflict, the Pandora’s Box along with the questions on whether or not the world would see another global war hindered in recent years on China’s moves in the Asia pacific region, and whether or not China would start to act on its claims of land in that region. The taking over of Woody Island is very much a provocation towards western allies by China that China indeed is moving on its claims in the region; a move which is seen as a direct threat on western allies in the region. China in recent years has been bulking up its military spending billions for “modernization” of its military.
Meanwhile in Europe, US and NATO allies have been fighting a proxy war with China’s ally Russia in the Ukraine since 2014. Russia took over the Ukrainian city of Crimea, claiming it to be part of Russia. Russia’s main concern regarding western backed policies has been that of “containment”.
Back during the cold war US and NATO policies to fight Russia and communism was to contain the big red giant to its own country. Russia after WW2 had great influence in eastern European countries, which lead all the way to Germany. NATO diplomatically fought back Russia by way of getting these Eastern European countries to become part of NATO to force Russia out of the region. Recently NATO installed missile defense systems in countries such as Poland, the Czech Republic and Turkey which are NATO allies and also very near to the Russian boarder. A move Russia found very provocative, thus invaded Crimea in the Ukraine. NATO defended the allied missile defense systems by stating these were to defend against missiles from Iran.
As for the middle-east, Russia has been pretty blunt in its support for Syrian dictator Bashar al-Assad. Attacking not just ISIL (which are a threat to al-Assad’s leadership) but NATO backed forces fighting ISIL in the region as well. This past week Russia bombed a civilian hospital in Syria. Most western backed allies in the region have publicly called that move a war crime. Russia emphatically denies it had anything to do with the bombing.
ISIL in the middle-east has been recently accused of using chemical weapons on civilians, and now recent reports suggest it may have its hands on highly radioactive material that went missing from Iraq a year ago. The Saudi’s are now massing troops to go into Syria, a move Russian president Vladimir Putin asserted could ignite another world war.
The world just seems to be hanging by a thread right now from total all out war. Most foreign correspondents who have covered global politics believe that thread that holds the world from another global conflict is shredded when China starts meddling around in its claims of land it has and starts to act on it in the pacific. Throughout history when the global economy is slow, world wars usually break out to stimulate economic growth. One would hope that we’ve learned the lessons of history as a global society, and that diplomacy wins the day. We’ve been very close to another global war on several occasions over the past 70 years since the last, and I think China’s move in the pacific brings us as close as we could ever get to another world war.