Thursday, September 22, 2011
What will APEC mean to Hawaii? Higher home prices, less affordable housing possibly
Image via Wikipedia
As Lt. Governor Brian Schatz noted in a recently circulated email, Hawaii is in the news in China. Actually, it always has been. But perhaps APEC has brought a new focus to the islands. Without a baseline measurement and media monitoring by professionals, it’s hard to say whether the Chinese public sees anything different yet due to APEC. I think the image in the Chinese mind is still something like this Wikipedia picture of Mauna Kea from Waikoloa.
From the email:
Media from Beijing, Shanghai, and Guangzhou visited Hawai‘i this summer and heard the message that Hawai‘i is a great place to visit and do business. They saw our world class observatories on Mauna Kea, visited cutting-edge health sciences and energy projects, and enjoyed our beautiful environment and warm hospitality.
As a result, millions of people have seen positive stories about Hawai‘i, in newspapers, on television and on computers throughout China.
[snip from email 9/22/2011]
(I can’t give you much more, they assert copyright on their emails, All rights reserved.!)
But how about a reality check? I’m not a native speaker of Chinese, but I can use search engines. I didn’t see much interest in doing business up among the observatories on Mauna Kea. Most pictures omit the scar of the observatories up on the mountain. Schatz might focus on something else. Down here where it’s warm is where the action will be.
It seems to me that the coverage hasn’t yet changed significantly. For example, the first news hit on Hawaii today was Xinhua News Agency coverage of the death on the zip line on the Big Island.
After that is tourist stuff, same as always. But there is more. There is news about the new direct flights from Shanghai, which again is tourism news. There is an article mentioning Sun Yat-Sen and his relationship to Hawaii. Great, but it might encourage Chinese tourists to visit Chinatown, in which case the resulting press might not be so favorable.
But there is also some real estate coverage creeping in. Not much, and it’s important while reading not to confuse articles on Hawaii real estate with real estate in China given Hawaii names, such as "Yanjiao Hawaii waterfront homes” which is over there, not here.
So I suggest that indeed Chinese web surfers, Chinese tourists and APEC visitors might take note of “our beautiful environment and warm hospitality”—and decide to buy up our homes.
As we’ve noted before, “our beautiful environment and warm hospitality” may appeal to CEOs, but sooner or later the bean counters intervene and the young company is outta here. Hawaii is a great place to live, though, isn’t it? Sun, surf, clean air… a certain lack of industry, actually. No filthy smokestacks.
It happened before when the Japanese economy was heating up. We should not be surprised if newly affluent Chinese want to trade their polluted suburban digs for a chunk of pristine Pacific island at least to visit in the winter.
On a recent Sunday, a Honolulu matron answered the door of her stately home to find three Japanese businessmen who offered her $300,000 for it on the spot; they wanted it as a vacation center for their Hiroshima workers. When she refused, the group's spokesman replied: "Ah, I understand. The $300,000 was merely for the house. The grounds we can discuss later." Similar, if less startling, offers are being made all over Hawaii these days as Japanese businessmen step up their efforts to buy control of hotels, shops, travel agencies, land and private estates.
[Time Magazine, Business: The Japanese Invade Hawaii, 7/2/1973]
The issue whenever this happens is that Hawaii housing becomes unaffordable for those of us who have lived here. Japanese billionaires drove up prices. So will Chinese billionaires.
It can and could happen again. Developers, who run this state, will of course be pleased.
From the email:
Governor Abercrombie recently welcomed the first direct flight from Shanghai, and we are working on securing additional direct flights from China. This will mean more jobs, more tax revenues and more opportunities for Hawai‘i’s businesses.
It will be a help, but whether business follows the airplanes or just tourists and house-hunters remains to be seen. More visitors of course is a good thing. Our economy depends on visitors, and not, thank goodness, on the high-tech that state government still hopes to promote.
If they don’t come, the direct flights will simply be cancelled. It costs too much to fuel a jet if it’s not getting a supporting passenger load.
So whether or not APEC brings business, it can help usher in a run on our housing market that may not be entirely pleasant. Unless, unlike the Honolulu matron above, you are looking to sell. In that case, 欢迎 (welcome).