Steve Hemingway

In the event the announcement didn't come. It seems to have had a major impact on Shenzhen property prices, driving them down recently - although there seems to be no agreement on the exact cause of the reversal of fortune.

I have sent out a few emails to registered investors suggesting that if they wish to beat the deadline they should pick a property and call us. In fact, perhaps sensibly, nobody did. Whether the deadline was real or not, there was certainly a rush to buy: I was asked to choose between three fairly ordinary small apartments in Gong Bei, but 24 hours later when I contacted Lua with my guidance she told me that they had all been sold!

The Adword advertising continues to bring emails from around the world from individuals who seem to know a great deal about the China real estate market. I have been thinking about appropriate structures for collective investment: REIT vs non REIT, listed vs non-listed, tiered structures with holding companies in tax havens etc. etc. I remain agnostic on the various claimed benefits, but not on the soundness of the China economy. Of course eventually the growth will run out of steam, but with GDP growth about four times that of the strongest growing western democracies it must have some way to go.

I have always liked bulletin board sites like Gumtree or Craigslist. I think they have a tremendous business model and will have entirely replaced the classifieds pages in local papers in the next half a decade.

I have found them very useful for recruitment. Compared to the hundreds of pounds it takes to advertise on Monster or similar sites with huge advertising budgets they are tremendously effective. My esteemed colleague Lua, of whom you have read many times, found Herts Lettings via Gumtree.

These sites do not, as yet, exist in mainland China. At least not that I can find. In Shenzhen however there is the admirable Shenzhen Party site, especially the jobs section. I put a small ad on this site, which used to be viewable at this address, but now seems to have disappeared. The text was:

I am looking for a Guangdong-based partner who can help me find investment opportunities for UK real-estate investors.

You will have to speak excellent English and work well under minimum supervision. You will have to be prepared to travel regularly to the UK, but your base will be China.

If you have legal or real estate background, or experience of working with a European employer then this will be positive.

Over a couple of weeks it was read 750 times (i.e. clickthrough from title) and produced 34 responses, the majority of which were quite suitable for the role, certainly as described (I forgot to specify that Mandarin Chinese was a must, because I assumed that I'd get inquiries exclusively from locals, but in fact got a significant proportion from foreigners working in Shenzhen or Guangzhou.

I will wait to discuss with Lua the final selection - not least because the role is the one she has been performing by flying back and forth to the country. I still don't know exactly how this will work out, because I feel I really need to provide some kind of office space and physical base there.

I have had much less success with Gumtree in London where I have been looking for web designers and accountants. If you know of anyone in these categories, please get in touch!

I have never really before seen the environmentalists' argument against Bjorn Lomborg. In a nutshell, he argues that there are many better ways of spending our money than trying to bring down carbon dioxide emissions. Rather than just having an emotional reaction to the latest perceived environmental problem, he argues, we should analyze what impact on the earth, and on human society, it will have, and spend money controlling it only if it is cost effective to do so. It is very interesting that the line is attack is not to challenge any of his figures, which encourages me to think that his analysis is perfectly sound, but to argue that the problem of climate change is so serious that any attempt to quantify the magnitude of the problem, and to scientifically assess the damage it is likely to cause and to look at dealing with this damage directly is some kind of sacrilege.

Some of Mr Burke's argument are truly extraordinary, especially from a Green. One is that if the costs of invading Iraq were properly computed and compared to the benefits of removing Saddam then we and the US would never have gone to war in the first place, but that because decisions like this are taken by some process called 'politics' the fact that we did indeed take this action proves that the 'economic' analysis is somehow flawed.

Oddly enough, later in the article, Burke accuses Lomborg of practising politics, rather than sticking to economics, even though politics was previously asserted to be a somehow superior means of arriving at big decisions.

But the most extraordinary part of the article comes at the end where Burke lays into the Economist magazine for giving a platform for Lomborg. He states Until it chose to give a Danish lecturer in politics of no academic distinction whatsoever the rare accolade of a named essay, the world had remained in peaceful ignorance of Lomborg's opinions.. This actually shows how close the environmental movement is to a religion. Burke says: But its heavy promotion of Lomborg's faith-based approach to the future suggests that its current editors have changed sides. They should be ashamed.. I have no doubt which side is faith-based, and it is not Lomborg's.

References

There is an amazing amount of stuff about this on the web. Much of it biased. Wikipedia is a good place to start.

We rarely watch live TV. Either we use a Tivo, or the much more recent, but also far inferior, V+ box. I have complained about the uselessness of the V+ box in the past.

This entry is nothing to do with these PVRs per se. The problem is the failure of those who compile TV listings to recognise that people increasingly do not watch TV live. There is an honourable exception to this rule: On the Box.

I am typing this while half-watching a TV programme, so I'm afraid this is going to be a rather feeble entry.

The average delay between accepting an offer and completing the purchase of a property in the UK is supposed to be three months. My colleague Lua was in China recently buying properties for me. On one occasion she made an offer for a property on Thursday, and by Sunday the property was not only sold to me, but was already rented out and generating income.

The market in China is quite amazing. Properties stay on the market for a matter of days. The whole process of transfer of title takes only weeks. The buyer is required to pay a deposit - say 10% - to the estate agent. The balance of the purchase price is due within weeks. If this is not forthcoming the deposit is lost. The estate agent is responsible for the whole process of registering the transfer with the appropriate government department. It also acts as an escrow agent, and accounts for any taxes payable, although the buyer must keep receipts for the taxes that have been paid or there can be problems when it comes to sell the property again.

Amazingly, estate agents in China will provide bridging financing for the buyer, especially one which has proved a reliable customer in the past.

Unlike in the UK, the buyer pays the estate agent's fees. Of course, estate agents' fees in the UK are borne by the buyer. They are only formally paid by the seller. Having the buyer pay the fees is quite an advantage, because the buyer can negotiate the fees as well as the sale price. Fees can be up to 3%, but these cover all legal expenses and mortgage arrangement fees. We have been successful in negotiating a rather better deal than this, but of course we are not in a position to obtain financing in China.

I think that the government doesn't care much about our personal liberties. I think it is the instinct of all those in power to control those of us who are not. The government doesn't really need an excuse to do this, but when one is available, such as the perceived terrorist threat, they seize it for all they are worth.

Thus the ID card scheme was born. It seems to me that this is a classic case of IT mission creep. As a one-time programmer I know in my bones that a lean, spare, flexible system with proper interfaces is much more powerful than one which is cross-braced with a myriad of special bells and whistles added too early in the design cycle. Most government IT systems seem to be of this latter type, particularly the computerisation of the NHS.

David Birch, in the current edition of Prospect Magazine, has proposed a brilliant design sketch (intro here). This provides a means of associating an individual, defined by an appropriate biometric signature, with a number. This is really all that is needed, and addresses all the problems about security and confidentiality at a stroke. The essential idea is that we are simply allocated a unique number (a classic database primary key) by an iris scanning machine. The first time we use this machine we are allocated a new number. The next time we simply get that originally-allocated number back. These machines could be installed widely in public places. The database backing this system would be extremely compact - just the biometric signature and the key.

Other systems which required positive identification could then use this key. Perfect!

Pensions seem a great thing. The government encourages pension savings by allowing us to save out of our gross income and by exempting pension savings from income and capital gains taxes.

So far so good. However, pension saving bears a huge burden of regulatory compliance. There are high costs associated with employing armies of actuaries to administer and oversee pension savings, and there are heavy opportunity costs of restricting savings to those areas the government deems suitable for pension investment.

I don't think that anybody really knows every rule that governs pensions. There are, as Google puts it 'about 11,200 pages' on the HMRC website that mention the word 'pension' or 'pensions'. I understand that early drafts of the overview of the so-called pensions simplification that came into force in April last year ran to over 3000 small-type pages.

It is not permitted for pensions to invest in residential property, and it is not permitted for pension equity to benefit from significant gearing, and it is not permitted for pension savings in close companies (fewer than ten shareholders). As far as I am concerned, these are not minor restrictions.

It is, it seems possible to invest in overseas companies, and these companies can invest in anything they like, including residential property. They are also permitted to borrow. It has been suggested to me that if I can 'round up' ten investors who would be interested in investing alongside me in a company, for example in the IoM, we can gear up this company and invest our capital in some suitable investment. These investors could invest some of their pension savings, as I plan to, or invest any other savings.

My preference would be for one of the offshore development vehicles set up by Chinese companies to benefit from a reduced Chinese tax charge. These are typically registered in the BVI or similar tax-haven countries, but investing in any Chinese property exposure seems good to me.

If you are interested in joining such a syndicate, please get in touch. I am not offering total democracy, but I will certainly be happy to discuss exactly what the moneys are invested in. As you have probably guessed, I have been in discussion with a pensions specialist about this kind of structure.

I have also discovered that, in principle, the requirement to liquidate the pension investment and purchase an annuity can be deferred at least until age 85. This removes one of the other major reservations I have about increased pension savings.

Property Snake is a cool site. It scrapes data from other property portals and tracks reductions in advertised prices. Rightmove and the rest will flag a property as having had a price reduction, but will never reveal by how much. Of course most large reductions just reflect unrealistic initial pricing, but there is a distinct difference between the number and size of price reductions in Cardiff and that in Hertfordshire.

As you might guess, my interest is in selling a flat in Cardiff. The sad news is that I am unlikely to get any more for it in pound terms, than I paid for it five years ago. So much for demand outstripping supply, and so much for the reports by Kate Barker and others that we need to build more homes in the UK.

Property Snake seems to source its data from Oodle. I have not come across this site before, but it seems to be really rather good - it aggregates advertisements from some very disparate sources - certainly local papers (Herts24) and from eBay. I am not sure it collects them from Gumtree and Craigslist - if it did it would really be the first choice for finding something locally.

Whether the not James Watson's expanation of Africa's underperformance is right or not, it is surely worth asking the question. It has been suggested that the relative underperformance of Africa is that economic failure in the nation states on the continent have not resulted in military failure and invasion by a neighbour, as it did through most of the history of Europe. Because it suited America and the Soviet Union to have client states throughout the continent from the end of the colonial era until today, failed states with deeply corrupt and economically suicidal governments have been propped up by military and humanitarian aid.

Empires like Britain's arose because market-based reforms allowed more efficient logistics, and a broader tax-base to finance military expansion. Now to the extent that African countries have armies they are used against their own citizens, or at least vunerable citizens of neighbouring countries.

Maybe this is all crap, but the idea that Zimbabweans are starving because of something the Brits did fifty years ago seems utterly implausible.