Office of YB Wong Chen
He’s Gone and Got Himself a Geoff Hurst!
Firstly, some happy news. One of my former interns, Liang Jia Hui who did two tours of internship duty at my office, has just graduated from Heriot-Watt University, UK. He obtained a Bachelor of Science in Financial Mathematics with Honours of the First Class. A big heartfelt congratulations to Jia Hui and his very proud parents from all of us at P104!
Secondly, the China led mass housing projects in Johor made headlines at Bloomberg website today. Capital controls in China has basically dampened the property market there.
When these China housing projects started some 5 years ago, a local property expert warned me that this market is primarily driven by a clever “buy one free one scheme” designed to take money out of China. Note that this was explained to me some 5 years ago, other more direct and clever schemes may have materialised since then.
The scheme can be explained by this simple illustration: A Chinese buyer buys a mansion in Shanghai and he gets a “free” apartment in Johor. He pays RMB 10 million in Shanghai for the mansion and then flies to Johor and sells the apartment in Johor for RMB 2 million. By doing this deal, the buyer has effectively taken out RMB 2 million out of China, bypassing capital controls.
You can read the Bloomberg article here.