Dateline, China’s Millionaire Migration

Transcript

Vancouver - on the surface it's as close to perfection as a city gets. A stunning place, set between mountains and the sea, it attracts immigrants from all over the world. Among them is Pam Zhao. Her affluent Chinese parents sent her here to study when she was just 12.

REPORTER: Were you aware at that age that your family was very wealthy?

PAM ZHAO, ULTRA RICH ASIAN GIRLS:  Not really, because what I thought is because I knew I had more allowance than others, but I remember I had my first Chanel wallet when I was in grade 9 or 10 but I didn't know it was a Chanel. I don’t see my family as super, super loaded or super rich I just think we’re at a point where we’re satisfied..

Pam's family came here under Canada's immigrant investor program which welcomed foreigners with a net worth of at least $1.6 million and she's far from alone. In fact, there are so many Chinese millionaires and their children in Vancouver, that the phenomenon has spawned an online reality show. And Pam, is one of the stars. The show is called 'Ultra Rich Asian Girls', and it documents the lives and shopping habits of some of Vancouver's wealthiest residents.

The program's been viewed millions of times all over the world. One of its biggest online followings is in Australia. These conspicuous consumers are the public face of a controversial migration trend. Canada's investor visa program has seen more than 100,000 Chinese millionaire migrants move to Vancouver in the past two decades. I have come to see what changes these migrant millionaires bring when they move to a city that’s no bigger than Brisbane. Today is a crew of 'Ultra Rich Asian Girls', are on location for season three of the show.

KEVIN LI, PRODUCER/DIRECTOR:  Pam, you've brought all the girls here, this is your idea, right, so let's say, I'm so happy, what are we making today? And tell us all about it.

It was Kevin Li's idea to film the Vancouverites, known in Mandarin of fuerdai.

KEVIN LI:  The fuerdai is the equivalent of trust fund kids and that translates to the rich second generation fuerdai. We filmed down in Beverley Hills in LA a couple of weeks ago and…

The extravagance of the fuerdai lifestyle is contentious, both inside and outside China. Perfect fodder for reality TV.

KEVIN LI:  There's a huge range of responses from my show, anything from utter disgust to utter fascination, the disgusting part of course is the amount of money that's been thrown around, they are talking about the Hermes handbag, starts at $15,000 and you know, you just can't have one, you have to have a few, right? People in Mainland China hate it. The news hates it, everybody hates it there, but they love talking about and they'll continue to watch it, so they can find something to hate about it.

Roll again. Three, two and one.

GIRL:   Everybody’s pink?

Audiences may love to hate it, but the show's stars say they are building their own personal brands in their adopted home land.

CHELSEA JIANG:  See that’s why we have so many mean comments… it’s from the producer.

This is Chelsea Jiang, her family became millionaires when China's newly privatised economy boomed in the late 90s.

CHELSEA JIANG:  So they decided to move to Canada, because it's peaceful, everybody is acceptable, it's loving. They want to move me into this environment.

Pam says when she first got to Vancouver, she found the Chinese population here foreign.

PAM ZHAO: Back then it was mainly people from Hong Kong or people from Taiwan so when I got here I was kind of the first one of the mainlanders who actually got here. Everybody was still speaking Cantonese and the Mandarin wasn't so popular here at all. 

In the years since, Mainland China's new riches have been pouring offshore, 450 billion dollars in personal wealth left the country last year. Driven by anti-corruption crackdowns, and fears for the economy. Some of that torrent of Chinese wealth is flowing into real estate here in Vancouver.

PAM ZHAO:  Can we go back there…?

KEVIN LI:  Yeah, yeah, walk around. Just watch your step.

Pam's just bought a new house and today she's looking for a retail store to rent. She's setting up a flower design business with friends.

PAM ZHAO: Do the workshop kind of over here.

There's no hard data on impact of ultra wealthy migrants on the property market here, but one thing is certainly - just like in Australia, prices are up - way up. The influx has triggered a massive construction boom across every inch of downtown. The scale of the change in Vancouver has left me a little stunned. When I was last here, 17 years ago, this was a low-rise sleepy town. Now, it's a forest of high-rise towers. Out in the suburbs, the market is even hotter. And unofficial stats suggest that in some suburbs, two thirds of buyers are ethnic Chinese.

ERIC COULOMBE, REAL ESTATE AGENT: It was originally built in 1930, it's been renovated in phases over the years and updated. Nothing in the way of recent updates.

Eric Coulombe' is showing me around the house his agency is selling. It's nice enough, but not as flash as its price tag.

ERIC COULOMBE:  As far as the value - listed for $2.88 million and most likely will receive competing offers, my guess will be it will sell for north of $3 million.

Eric tells me on average houses are selling in five to ten days and the new owners will most likely tear it down or keep it empty as a wealth preserves investment. A short drive away, I find this ageing two-bedroom townhouse on the market for around $900,000. Potential buyer Alix says it's tough for locals to get into the market.

ALIX, POTENTIAL BUYER:  I have three kids that are renting, right now my middle daughter is living with me and my eldest daughter is married to a doctor and she is a doctor herself and can't afford to live in the west side of Vancouver, that's where they would like to live so they are renting. For the young people, they just can't live in Vancouver. They can't.

IAN YOUNG, JOURNALIST:  It doesn't matter if you are a doctor or a lawyer.

Ian Young is an Australian born journalist, who has made Vancouver his home. He's been shocked by what's happening here.

IAN YOUNG:  You're not going to be able to afford a $3 million house in this neighbourhood on an average household income of $85,000. Not if you are funding your purchases with domestic income. And I don't think the people are.

That disconnect between local incomes and house prices has made Vancouver the second most unaffordable city in the world for four of the past five years.

IAN YOUNG:  If we look at 2015, single family loans here went up 40%, that's got to be world-leading, 40%.

But these rapid changes have sparked surprisingly little debate here, Canada‘s famous multicultural society has made a discussion involving race almost taboo.

IAN YOUNG:  Quite rightly people are very cautious, when you are talking about issues regarding race and immigration but this isn't really an issue, I think, about race, this is an issue about wealth. You know, it doesn't really matter whether, you know, the buyers in Vancouver are Chinese or non-Chinese or immigrants or non-immigrants. What matters is whether or not they are earning domestically, that's what fuels unaffordability.

The first Chinese immigrants arrived in Canada 160 years ago. They were hard-working labourers who lived in poverty.

KEVIN LI:   What we have here is some of the documentaries I have done, about the early Chinese pioneers living in Victoria BC...

TV producer, Kevin Li's parents came from Hong Kong in the 70s, before making 'Ultra Rich Asian Girls', Kevin's work often focused on the local Chinese heritage.

KEVIN LI:  This is one of their earliest photos of Chinese in Victoria BC. Chinese have been in Canada since the mid 1800s, so it plays huge into the fabric of Canadian society. Of course the Chinese built the rail roads, and they volunteered the time in their lives during the Second World War. The Chinese played a huge part in Canadian society.

Vancouver's Chinese population may be on the up and up, but its Chinatown isn't. In fact, I find it shrunk to a couple of blocks with few signs of life.

REPORTER:  What's going on in terms of businesses here?

DANNY QUON, CHINATOWN RESIDENT:  Well, a lot of the old businesses have left Chinatown. This one closed up. It used to be a Chinese coffee house, but now they closed up.

Danny Quon is a second generation Canadian of Cantonese descent. He's been coming here to the Hon Hsing athletic club since he was a young boy.

DANNY QUON: This black and white photo dates back to 1939. It's the founding of our club by the Wong society.

Danny teaches lion dancing and there are also traditional martial arts classes here, but there are hardly any students. Danny says the cultural revolution in China means most young mainlanders he meets don't identify with the old traditions.

DANNY QUON:  Many of the parents grew up during a time in China when practicing your own traditions and heritage was frowned upon by the communist Government. So, you can see that domino effect.

Despite being ethnically Chinese, Danny feels a cultural disconnect with the millionaire migrants.

DANNY QUON:  Chinese mainland immigrants today seem to only focus on, I guess, trappings of wealth. They like to flaunt their new found wealth through expensive cars, real estate, and that's not to say there's anything wrong with that, but when it comes to connecting with their own culture and heritage, I'd be surprised to find any - at least the ones who I have met, any who are in tune with their own culture.

PAM ZHAO: I never buy stuffs from Chinatown, I actually don’t really go there but I’m trying since my producer always convinces me that Chinatown has evolved.

Pam, one of the stars of the reality show 'Ultra Rich Asian Girls', recently visited Vancouver's Chinatown for her first time in 13 years here.

PAM ZHAO: I mean it is vintage, of course keep it the way it is but to us that's not even what we lived in. So even I see, I’m like that looks pretty old, I haven't really seen buildings like that before.

REPORTER: Are you disappointed that the new immigrants aren't engaging more with organisations like this?

DANNY QUON:  I am, I am a little bit disappointed because you try to reintroduce this to them, their culture, and they find it foreign and they find it, if I could use the term, distasteful.

Ironically the influx of millionaire mainlanders could end up being the death of Chinatown institutions like Hon Hsing. Skyrocketing property prices are slowly making land taxes unbearable.

DANNY QUON:  We run totally only on donations from our members, and when you have a property tax bill in the five figures, it's kind of hard to...

REPORTER:  Is that putting a strain on things?

DANNY QUON:  Not yet, but I foresee in the near future if things don't give, yeah, it could be a deal-breaker.

CHELSEA JIANG:  Chateau Latour, 1995.

WAITRESS:  Perfect, good choice.

The stars of 'Ultra Rich Asian Girls' say they are not bothered by criticisms of their lifestyle and wealth.

CHELSEA JIANG:  Resentment is already out there but I am not worried about it because I only need to deal with people who can see the truth or who can see what is really going on.

PAM ZHAO:  Season one a lot of people were judging saying oh these people are a just waste of the society and they are just wasting resources and they're just living based on what's given but that's actually not true.

Pam's defying the stereo type by becoming an entrepreneur in her own right.

PAM ZHAO: Black and white? Yeah, black and white and then maybe natural colour.

Today she's picking up packaging for the business she's starting with family money. Their flower shop will pay local taxes once it turns a profit.

CHELSEA JIANG:  And it’s 100% organic cotton.

Chelsea has also started a business, an online store for new mothers. But while some of the fuerdai generation are diving into Canada's economy, some say they are the exception among millionaire migrants.

IAN YOUNG:  The primary bread-winners that arrived under those schemes, we are talking multi millionaires here were only paying an average of $1,400 in income tax each year. You know, they were declaring less income than refugees in many cases. The Government doesn't like sharing a lot of this information either.

Journalist Ian Young has been closely following Canada's immigrant investment visa program, which peaked in 2010.

IAN YOUNG:  There were 35,000 applications that year, and virtually all of them, basically they were all mainland Chinese, millionaires, who just flocked to these schemes, so it was really just insane.

Ian‘s research found that the businesses started by millionaire migrants employ on average a grand total of one person.

IAN YOUNG:  Clearly the imigrant investor program, has just been abject failures, in terms of fostering economic growth and in terms of fostering business growth and jobs.

While the Canadian Government has never described it as a failure, the Federal investor visa program has now been shut down all together. But in a uniquely Canadian quirk, Quebec is allowed to run its own migration policy, it allows thousands of migrants to immigrate each year provided they make an $800,000 loan to the Quebec Government. But once they are on Canadian soil, 90% of the millionaire migrant leave Quebec.

KERRY STARCHUK, LOCAL RESIDENT:  This house was recently bought here, this is a new style here.

Kerry Starchuk believes the ongoing influx is not just failing the economy, but it's destroying her community.

KERRY STARCHUK:  The prices go up by the day, so it's hard to keep you.

Kerry says at least ten houses on her street are now empty. Bought by millionaire migrants as investments.

KERRY STARCHUK:  You can see the lights go on and everything, but there's nobody there. Just sold for $1.9 and there is still nobody living in it, I’ve never seen anybody living in that house. It sat empty for five years and still sits empty.

Kerry's family have been here four generations but now, she says, the sense of community has evaporated and the fact that her own modest house has skyrocketed in value is no compensation.

KERRY STARCHUK:  I'm not happy my house is worth a million five, I'm not happy at all, because I have to pay more taxes. My kids are never going to be able to afford to live here and we are losing our community. No, I'm not happy. Money has taken precedence over our neighbourhoods. This one here is all the letters I have written to the different politicians. Not good news.

Kerry's been channelling frustration into activism. But the local mayor simply told her to take the money and move and her Facebook group and media appearances haven't always been well received.

KERRY STARCHUK:  One lady picked my name up and called me a white supremist and racist. I was really, really hurt. I lived in a multicultural community here. My best friend's Chinese, my daughter-in-law is from Japan.

Some suspect the accusations of racism are a convenient cover for greed.

IAN YOUNG:  We have seen the development industry here, very very keen to push the notion that this is a form of yellow perilism. It's quite striking you have this coatry of wealthy white investors accusing people of being racists, because they are raising concerns about the impact of millionaire migration, selling passports.

The speed and intensity of the boom has left many searching for answers. Tonight, concerned locals are filing into a community meeting.

PROFESSOR DAVID LEY:  The typical Chinese investment portfolio is half real estate. So, real estate is an important part of the story.

Professor David Ley has been studying immigration and housing market bubbles around the world. He believes while Australia is facing similar forces, it's attempting policies to control the boom. While Canada isn't.

PROFESSOR DAVID LEY:  Melbourne yesterday doubled a tax of 3% to 7% on foreign buyers...

While the situation feels dire to the people here tonight, David is quick to remind me these migrations are a regular feature of human history.

PROFESSOR DAVID LEY:  You go back one generation, it will be the US, you go back 100 years in Australia or in Canada and it would be the UK. You know, it is just where we are today.

With their enormous wealth and provocative TV show these reality stars could make for easy targets. Fate has made them the designer clad vangard of global forces beyond anyone's control. But it's a role they have decided to embrace.

CHELSEA JIANG:  I totally understand, it feels like there's a rush of water coming to the land, all of a sudden you're not living in dry land anymore you're living in the ocean. I totally understand that but then hey, time changes, Everywhere it changes. Chinese brought you great food and better economy what's there to complain about?

After generations of economic weakness, China is now flexing its financial muscles. And enjoying the good life, like every empire and super power before it. It's up to its neighbours around the world to figure out how to cope with the new guests at the party. And for the guests to figure out how they are going to fit in.

CHELSEA JIANG:  In Vancouver I feel I'm fully at home. You know why? Because Vancouver is caught changing from Canadian to Chinese town actually. For myself I'm caught in between Chinese and Canadian.

Avoiding becoming no more than a resort town stranded in the middle will be Vancouver's challenge for the years ahead.

Video Journalist
Aaron Thomas

Producer
Dean Cornish

Editor
Aaron Thomas

7th June 2016