In 2015, as home prices skyrocketed in Vancouver, then B.C. premier Christy Clark and then trade minister Teresa Wat held intimate meetings with
Hong Kong developers and donors who had billions invested in Vancouver property.
They wanted to know if Clark’s government would intervene in the market to reduce prices, according to documents obtained by Postmedia News show.
The internal Ministry of Trade documents, released through a freedom-of-information request, for the first time reveal some of the courting strategies employed by Clark and Wat for trade meetings with real estate tycoons and corporations in China and Hong Kong.
The 477 pages of notes highlight a “master narrative” about the significant place of foreign investment in Vancouver real estate, which differs from the government’s public stance in 2015.
The documents say that Wat first met in April of 2015 with one of Hong Kong’s richest billionaires, Edwin Leong. There was a followup meeting for Clark and Wat arranged with Leong and other investors on Nov. 7, 2015, on the 29th floor of Leong’s Hotel Indigo, in Hong Kong’s Wai Chan district.
Meeting notes for the “afternoon-tea with Hong Kong Investors” say: “This is an informal roundtable discussion with an intimate group of long-standing investors and donors in the Vancouver economy. Many of these investors have real estate holdings in Vancouver worth several billion dollars.”
Leong is a property developer with a net worth estimated at US$3.9 billion, and over 1,000 properties and stores in Hong Kong and Macau, according to the South China Morning Post. Documents say other meeting attendees included Eddie Wang, former chairman of China Minsheng Bank; Andrew Yu, chairman of Yue Hwa Chinese Emporium; and Oscar Chow, executive director of Chevalier Group.
According to the notes, Clark and Wat were prepared to answer a number of hot-button questions on economic policy and the B.C. government’s position on trade with China.
“Are you considering any policy changes in light of the recent property valuations and public concerns for affordable housing?” was one expected question.
The response prepared for Clark and Wat was: “Government would need to proceed very carefully before considering measures that would force down the value of people’s assets and prevent sellers from obtaining a fair market price.”
Back at home, meantime, public complaints about housing affordability in B.C. was so intense that Vancouver Mayor Gregor Robertson had released a letter urging Clark to take extraordinary tax measures to cool speculation in the market. Clark’s response said there was no reason to tax luxury housing because Finance Ministry data suggested little evidence that foreign investors made up a significant portion of the market.
However, notes for Wat’s 2015 Asia trade mission show a different “master narrative” for internal use only. Potential foreign investors were to be pitched with the argument that the “landmark … progressive and open-minded” sale of the Expo 86 lands to Hong Kong property tycoon Li Ka-shing, a massive transaction in 1988 for one-sixth of Vancouver’s downtown lands, “paved the way for the influx of capital that followed.”
The notes say potential Asian investors were to be told that, “the government’s willingness to permit a foreigner to own a significant portion of Vancouver … marked a significant turning point in the city’s development.”
Just over a year later, in mid-2016, government figures showed foreign investors were indeed driving up prices in some Lower Mainland cities, and Clark’s government brought in the 15 per cent foreign investor tax.
Notes for the 2015 meetings in Hong Kong show Clark and Wat were prepared for questions about Li Ka-shing’s rapid selling of his properties in China and Hong Kong, and a restructuring that would mean his investments were held in the Cayman Islands. It was a controversial issue in China at the time. An editorial in Chinese state-run media in September 2015, according to the Morning Post, charged that Li “has fallen from the moral high ground.” The editorial reminded Li “that his huge wealth as head of the Hutchison Whampoa conglomerate had come from his connections to powerful Chinese officials.”
Meeting notes said that Clark and Wat could be asked: “What would you infer from (Li Ka-shing’s) latest corporate restructure?”
The government’s prepared answer has been completely redacted from documents released to Postmedia.
Some of the investors that Clark and Wat met with in 2015 have courted controversy with regulators in Hong Kong and China, according to media reports in Asia, or have avoided property taxes through loopholes, or have been linked to offshore banking databases. And some of the Chinese development corporations have been linked to fraud and corruption allegations.
In a prepared response, Wat, now the B.C. Liberal critic for trade, noted that NDP Premier John Horgan is planning a trade mission to China.
“As the former minister of international trade, I’m proud of our record of opening doors to investment and ensuring the province continues to grow,” the statement said.
NDP Finance Minister Carole James issued a statement: “Regarding the specific allegations, I think those questions are better put to MLA Wat.
Making life more affordable for British Columbians is our priority. It’s clear the previous government had other priorities.”
On Nov. 5, 2015, Clark and Wat met with potential Chinese investors on the 71st floor of the Four Seasons Hotel in Guangzhou, meeting notes say.
Attendees included executives from Huawei Canada, Guangdong Rising Assets Management, Evergrande Group, and Guangzhou Development Group, meeting notes say.
A number of former executives from Guangdong Rising Assets Management, a state-owned enterprise involved in real estate, mining and tourism, are currently under investigation for corruption, according to Chinese media reports, specifically in connection to investments in Australia. One of those under investigation includes Li Zezhong, the mayor of Zhuhai, a Chinese city near Macau and Hong Kong.
In October 2016, Evergrande Group, one of China’s largest residential developers, was accused by housing officials in China of “illegal sales and malicious speculation” that allegedly induced a frenzy of “panic buying” among Chinese home buyers, the South China Morning Post reported.
Evergrande has reportedly declined to comment on the accusation.
Also, in 2015, a deputy general manager of Guangzhou Development Group was removed from his post in connection to graft and corruption investigations, the state-run China Daily reported.