Rich Chinese reshaping Metro: insider
No questions asked when wealthy immigrants buy up property, former UBC professor says
Setty Pendakur has an insider’s knowledge of mainland China’s growth pains, which he recognizes are re-shaping Metro Vancouver. “In the past 25 years, I’ve probably been to China about 86 times,” says the University of B.C. urban planning professor emeritus.
China has expanded from the world’s 38th largest economy in 2001 to second biggest in 2015, Pendakur said. And China’s Communist leaders want to soon surpass the U.S.
India-born Pendakur, who believes he became the first visible minority politician in B.C. when elected to Vancouver city council in 1972, has helped shape the powerful country through his work for the World Bank and as senior adviser to China’s State Council, which gives him the ear of top politicians.
While Pendakur sympathizes with the difficulties Chinese people are going through in regards to pollution, threatening neighbours and corruption, he is also concerned by what is happening to Metro Vancouver as a result of China’s explosive riches.
Metro’s soaring housing prices, he says, are significantly fuelled by wealthy Chinese flocking to Canada, which, unlike other countries, has virtually no restrictions on offshore money.
A variety of tax and immigration measures could make Metro housing less vulnerable to speculators and more affordable for those living here, he said, but Canadian politicians aren’t touching them.
Metro Vancouver is being hit hard by globalization, by untold wealth flowing across borders.
“China has 1.3 billion people,” Pendakur said. “If only 10 per cent of them have become very rich, which is a fair estimation, that’s 130 million people. The scale is enormous.”
Moneyed Chinese, Pendakur said, are scouring the globe for tax havens. While some find unmarked bank accounts in tiny Caribbean countries like Antigua, he said others try to transfer their fortunes to Canada.
“Canada is only a big Caribbean country. We don’t ask questions about where money comes from,” says Pendakur, noting Britain has stricter controls.
Making his home in Vancouver, a city he has loved since arriving at UBC on a scholarship in the mid-1950s, Pendakur values discussing such hot issues with his sons, SFU economist Krishna Pendakur and University of Ottawa sociologist Ravi Pendakur.
Despite airing blunt opinions, Pendakur has never felt censored by China’s top officials, whom he has advised on planning, especially about transportation.
Indeed, Pendakur believes most Chinese feel fairly free in their daily lives, even while some restrictions exist, including on the religion Falun Gong.
After largely winning the globalization battle, Pendakur said, China is again adjusting to ruthless free-trade logic.
Chinese workers in manufacturing have begun earning decent wages, he said. So the country has conceded its competitive edge to rock-bottomwage nations like Cambodia and Thailand.
Given uncertainty, many wealthy Chinese are not only trying to get their money out, they’re trying to get themselves out — in the midst of a crackdown on corruption Pendakur sees as legitimate.
Rich Chinese often view their children as their best escape route, he said. So they’ll do anything to have them educated in English-language countries.
Pendakur scorns the glut of private “colleges” and “universities” that exist for foreign students in Metro because the B.C. government dubiously granted them status.
“Parents in China want their son or daughter to get a Canadian degree. But most of them cannot get into UBC, SFU or UNBC or anywhere else. So they sign up for these two-room colleges.”
Given Canada’s readiness to turn foreign students into citizens, Pendakur maintained many rich families in China send their children to Metro mostly so the parents themselves will have sponsors for coveted Canadian passports. This opportunity is not available to low-income Chinese.
“The loopholes are tremendous” in Canada’s immigration policy, Pendakur said, maintaining they became more open to abuse under Prime Minister Brian Mulroney.
“Mulroney had this attitude that if you were rich, you must be good,” said Pendakur, noting such an attitude does a disservice to would-be immigrants with skills or fluency in English. “Does anyone ask where they got their money?”
Even though the Conservative government cancelled the immigrant-investor program in 2014, Pendakur said a giant backdoor loophole remains through Quebec’s investor scheme, which continues to bring thousands of wealthy people, mostly Chinese, to Metro.
Canada’s elected officials don’t stop the stream of offshore wealth, Pendakur said, in part because they’re beholden to political donations from ethnic Chinese.
Pendakur’s not despairing, though.
He’s travelling, spending time with wife and family and serving on non-profit boards.