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Fromage Frais

How Much Is Too Much Foreign Investment?

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Hi Guys,

Sorry to sound like a moaner.....but i am going to to do it.

Been looking at some run down hotels in the regions..

However in the last 4/5 occasions the "winning/overpaying" bidders have been Chinese, Thai, Indian etc companies...... some of which have borrowed money often on properties which I where told finance would not be available.

Apparently its happening all over the agents are loving it of course but they forget if I cannot make the hotel pay as a local with cash and running it myself with family members how can someone so far away do it hands length with a massive loan?

At worst its game over for locals or at best (i say best) a massive bubble in foreign investment as dummies buy assets which really are not suitable for arms length investment with low returns.

What started in London Property has spread out big time anyone else seeing foreign investors hoovering up the dregs so to speak?

Edited by Fromage Frais

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Front page of the Cambridge Evening News is about the "first £5k a month" apartment in Cambridge.

When you read the story it was purchased off plan by a Chinese investor for £1.3m then sold on for an undisclosed amount and has recently been put up for sale for £1.5m or £5k a month rental.

Anecdotally I have heard that entire blocks of newly built flats in Cambridge are purchased by Singaporeans/Chinese and German pension funds. We are supposed to be grateful that foreign investors are appreciating the investment climate but I'd rather not pay a 50% premium because some likely ill gotten money needs laundering through houses in the city I live in.

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We shifted all our factories over there. Factories produce money for the owners - and they can buy with cash. We have had our arms and legs effectively removed and thus our ability to earn in the world is reduced. We just can't put down the money even as a deposit to compete. London property is the same.

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Yep. This is quite a lot of the foreign direct investment the Tories and Labour tell us will help us all. London continues to be the no. 1 place where money laundering happens. Its just so easy. All the accountants and lawyers are nicely setup to help. This will only get worse as the pound gets to parity with the dollar in the coming years. The people who are tied to their made up idea of country and values are the ones who suffer whilst mobile capitalists move to the best locations to exploit labour arbitrage and wield hidden political power.

FYI The reason Chinese can run a hotel more efficiently is that they manage businesses to the bone and work 7 days a week. They also know how to avoid tax legally better than natives because they have grown up with a culture of intrusive government.

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... and yet, whilst we sell real property to any foreigner, companies many not be sold. I'm frankly sick to death of the serial abuse of my property rights wrt listed UK companies.

BSkyB

Astra Zeneca

and now BP.

MY SHARES, MY RIGHT TO SELL OR NOT, MY RIGHT TO ACCEPT A FOREIGN TAKEOVER BID!

Clearly, our willingness to allow the wholesale buy-up of London prime real estate has little to do with a belief in free markets....

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What gets me is that we don't demand reciprocity. Try buying a house in China or Singapore and see how far you get. Try taking over a Chinese or Indian company and see how far you get. Try taking over French or German water supplies or energy companies, or defence companies. However, we're willing to bend over and take it, handing them not just our businesses, and our jobs, but our main natural resource - land. Not a single mention of this in the election campaign as far as I am aware. We just need a policy of reciprocity, would stop this very quickly.

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FYI The reason Chinese ... know how to avoid tax legally better than natives because they have grown up with a culture of intrusive government.

Actually what you are saying is that in China you step outta line and they slam you in jail w/o trial, whereas here, they send round some guy with a clipboard to offer assistance. Surprise, surprise, nobody takes it seriously... ever seen those food inspector progs? They should change those guys' titles. Something like "free heath and safety consultants" would be more appropriate.

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What gets me is that we don't demand reciprocity. Try buying a house in China or Singapore and see how far you get. Try taking over a Chinese or Indian company and see how far you get. Try taking over French or German water supplies or energy companies, or defence companies. However, we're willing to bend over and take it, handing them not just our businesses, and our jobs, but our main natural resource - land. Not a single mention of this in the election campaign as far as I am aware. We just need a policy of reciprocity, would stop this very quickly.

*1

We are a strange nation, led by a traitorous and self-interested elite who seem to do what is best for them.

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It happened in London late on in the 1980s house price boom. Japanese buying office blocks for incredible amounts of money through the Japanese miracle economy and their wall of money. House prices collapsed soon afterwards.

That's not to say that the same will happen this time but there's a chance it will. It would be a surprise if the Chinese hadn't taken the risk of that sort of historical event repeating into account in their calculations but sometimes greed overcomes that. That plus if it's desperate free money then maybe they don't mind the risk of a loss so much.

"How much is too much foreign investment" - possibly too much is when the foreign investment in houses/property is setting house prices/property prices higher and higher when they were already too high for locals in an economy that is already wrecked partly through house prices already being far too high.

Edited by billybong

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Foreign investment is great, these are just foreign rent seekers - there is a difference.

+1

Although it depends on the conditions set by the foreign investment. If it means that it just ends up buying up and controlling the country (for example) reducing most of the population's living standards as a consequence then it might not be such a good idea.

The UK's real living standard and real quality of life is already pretty poor to start with as the UK population has to live in some of the smallest and most expensive homes in the world for a "developed" nation (on average).

Edited by billybong

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