Chinese are skirting rules aimed at limiting their purchases of property in Taiwan, stirring anger among local home buyers and fuelling worries over Beijing’s creeping influence over the nation.
While Chinese money has boosted property markets across the world — from Sydney and London to Vancouver — Chinese capital flows into Taiwan are an especially emotive issue for many Taiwanese. Taiwan’s government has been criticized by some for not being more restrictive on Chinese ownership of Taiwanese real estate.
Fueling fears of further encroachment by Beijing is a review of a cross-strait trade deal next month. In March and April, hundreds of students occupied the Legislative Yuan for more than three weeks to protest against the service trade pact.
Photo: Reuters
Shih Ming-shih, a senior Ministry of the Interior official, said that the government had imposed measures to limit Chinese from buying too many homes as such a move “would jeopardize our national security or economic development.”
“If people do not apply legally, there is no way we can stop that, but they have to bear the risk of losing the properties they bought,” Shih said in a warning to would-be violators.
Some Taiwanese feel priced out of the property market at a time when President Ma Ying-jeou’s (馬英九) government is trying to convince them of the advantages of closer economic integration with China through the service trade pact.
Photo: Reuters
“If mainlanders are in the market, we don’t even have a chance. What if, in the end, those who live in Taiwan aren’t Taiwanese but Chinese?” said Melissa Hu, a 40-year-old public servant in Taipei.
Some property agents said loopholes that allow Chinese buyers to get around restrictions make it difficult for Taiwan to take meaningful action.
“It’s impossible for the Taiwan government to fix it. The best it can do is to set up a limit on how many houses Chinese can buy each year,” said Stanley Su, research and development manager at Sinyi Realty Co in Taipei. “That way, it can at least avoid a situation where massive inflows of Chinese investment go to Taiwan’s property market.”
Money from China has helped drive home prices in Taipei up almost 200 percent in the past decade, according to property agents.
Taiwan imposes strict rules on Chinese home buyers, including restrictions on quick re-sales and background checks to exclude people with links to the Chinese Communist Party and People’s Liberation Army.
However, many Chinese investors have found ways around those barriers, usually by buying homes through Taiwanese business partners or using overseas investment schemes to mask their activity, agents and industry watchers said.
While the number of individual Chinese buyers is small — Taiwan allows only 400 apartments to be sold to Chinese each year — it is clear that more Chinese capital is flowing in.
Government figures show Chinese have bought 160 properties valued at NT$2.3 billion (US$76.6 million) since Taiwan allowed Chinese capital to invest in real estate in 2002. However, many industry watchers and agents say that those numbers are under-reported.
In just one transaction two years ago, a Taipei-based real-estate attorney said he helped a Chinese state-owned steel company buy land worth NT$580 million under the name of a Taiwanese shareholder.
The deal, concluded in Hong Kong, was recorded as a domestic transaction and surpassed the NT$530 million in Chinese property investment reported by the government from 2002 to 2011.
“Transactions under the table would be at least 10 times more than what we see on the table,” said the attorney, who declined to be identified due to the sensitivity of the matter.
“Most mainland investments detour through somewhere else in order to enter Taiwan, which is quite mysterious and makes it hard to trace where those overseas companies are really from,” said Erin Ting, senior research manager at property consultancy Savills.
Some places where Chinese investors set up overseas subsidiaries before entering Taiwan include Hong Kong, Singapore and the British Virgin Islands (BVI), some agents said.
“The government only looks at the very last door of the money flows,” Ting said. “It’s likely that many are from mainland China, but it’s all under the table so no one would say it out loud.”
Wu Zhongxian, commercial property assistant manager at property agency H&B Business Group, said Chinese investors were eyeing hotels and retail shops in popular tourist areas as Taiwan allowed more individual Chinese tourists to visit.
“It takes them 1.5 to two years if they follow government rules,” Wu said. “So they buy via BVI firms or through a particular person in the company.”
Beijing-based developer Vantone Real Estate, the first Chinese developer to enter Taiwan’s market in 2011 by setting up an associate company in Singapore, said 40 percent of its 294 high-end apartments in Taipei had been sold to Chinese buyers by last month.
“Many Chinese clients are longing for Taiwan,” said Kidd Lin, sales manager at Vantone International Development Ltd. “Taiwan offers a lifestyle that the Chinese middle class are most looking forward to.”
Many Chinese are attracted to Taiwan thanks to a similar language and culture.
Vantone’s large, high-end apartments just 30 minutes from the center of Taipei sell for between NT$30 million and NT$100 million.
Other Chinese developers, including Fujian-based Yuzhou Properties, are planning to follow Vantone into the Taiwanese market.
However, Vantone’s Taipei project — the first large-scale home sales to Chinese — may be subject to strict government scrutiny and it remains to be seen how many apartment sales will be approved to Chinese as local elections approach, several industry watchers said.
“It’s sensitive timing. We want to stay low-key,” said Lana Xie, founder of a real-estate agency in Beijing that targets individual Chinese buyers for Taiwanese residential property.
Xie said transactions had doubled in the first half of this year, with most Chinese buyers chasing “holiday homes” in southern Taiwanese cities.
“It’s really not easy for Chinese to buy a property in Taiwan,” Xie said.
“That’s why owning a Taiwan house is really something Chinese can show off to everyone,” she said.
Additional reporting by James Zhang and Clare Jim
Former Czech Republic-based Taiwanese researcher Cheng Yu-chin (鄭宇欽) has been sentenced to seven years in prison on espionage-related charges, China’s Ministry of State Security announced yesterday. China said Cheng was a spy for Taiwan who “masqueraded as a professor” and that he was previously an assistant to former Cabinet secretary-general Cho Jung-tai (卓榮泰). President-elect William Lai (賴清德) on Wednesday last week announced Cho would be his premier when Lai is inaugurated next month. Today is China’s “National Security Education Day.” The Chinese ministry yesterday released a video online showing arrests over the past 10 years of people alleged to be
THE HAWAII FACTOR: While a 1965 opinion said an attack on Hawaii would not trigger Article 5, the text of the treaty suggests the state is covered, the report says NATO could be drawn into a conflict in the Taiwan Strait if Chinese forces attacked the US mainland or Hawaii, a NATO Defense College report published on Monday says. The report, written by James Lee, an assistant research fellow at Academia Sinica’s Institute of European and American Studies, states that under certain conditions a Taiwan contingency could trigger Article 5 of NATO, under which an attack against any member of the alliance is considered an attack against all members, necessitating a response. Article 6 of the North Atlantic Treaty specifies that an armed attack in the territory of any member in Europe,
LIKE FAMILY: People now treat dogs and cats as family members. They receive the same medical treatments and tests as humans do, a veterinary association official said The number of pet dogs and cats in Taiwan has officially outnumbered the number of human newborns last year, data from the Ministry of Agriculture’s pet registration information system showed. As of last year, Taiwan had 94,544 registered pet dogs and 137,652 pet cats, the data showed. By contrast, 135,571 babies were born last year. Demand for medical care for pet animals has also risen. As of Feb. 29, there were 5,773 veterinarians in Taiwan, 3,993 of whom were for pet animals, statistics from the Animal and Plant Health Inspection Agency showed. In 2022, the nation had 3,077 pediatricians. As of last
XINJIANG: Officials are conducting a report into amending an existing law or to enact a special law to prohibit goods using forced labor Taiwan is mulling an amendment prohibiting the importation of goods using forced labor, similar to the Uyghur Forced Labor Prevention Act (UFLPA) passed by the US Congress in 2021 that imposed limits on goods produced using forced labor in China’s Xinjiang region. A government official who wished to remain anonymous said yesterday that as the US customs law explicitly prohibits the importation of goods made using forced labor, in 2021 it passed the specialized UFLPA to limit the importation of cotton and other goods from China’s Xinjiang Uyghur region. Taiwan does not have the legal basis to prohibit the importation of goods