日志

Given that real estate as the significant media to have triggered the Financial crisis of 2008, for overheated real estate in Canada, we must carefully explore the appropriate corresponding measures to avoid the occurrence of serious consequences.

The experience of Japan's Bubble Economy 1980s shows that overheated real estate is not only resulting in the destruction of the real economy, but also resulting in the destruction of the National's Quality - the foundation for the development of the real economy.

Since that the greed of human inborn nature will drive some people as profit-chasing speculators in addicting for unearned opportunistic. And the unearned speculation can distort the life philosophy of people with addicting luxury life but despising for social wealth creation.

Economic recession acts as curable flu, but, the loss of entrepreneurial spirit and social responsibility of the nationals acts as incurable cancer. The improper economic policies will provide a favorable environment for those speculators to damage nationals qualities and real economy.

This is one of the main reasons that Japanese economy has been long-term downturn. And it is why that Japanese Prime Minister Shinzo Abe's the Three Magic Arrows to stimulate the economy does not achieve the desired results.

The soaring rise in the cost of living pushed by speculators on real estate is damaging the real economy in Vancouver Canada.

The economic plight in Vancouver shows that Canada is facing a vital historical moment for economic strategy adjusting.

This article will focus on the negative impact of bubble economy on people's quality.

Special Note：In consideration of, in this topic, I have cited some weakness of some individual, enterprises and countries as example, which may cause some displeasure, I specially wrote the article Kondo Daisuke, A Rational Man of Japan to introduce the good quality of I admired Japanese man to show my good will and with no any bad intention in citing those weakness. I hope that what I talked here can help to improve the wrongful ideology in corporate management.

--- Frank Aug. 30, 2014 in Waterloo, On. Ca.

[Abstract] The Real Economy is concerned with actually producing goods and services. Financial economy is concerned with buying and selling on the financial markets to make money by money.

Nowadays, the vast majority of social unrest is associated with the difficulties in life, which is not mainly due to the shortage of the social wealth, but the unequal distribution of wealth in society that caused by speculators over plundering on the real economy with financial instruments, the over heated real estate market is playing such a role.

Recent years, the speculators are squeezing city's builders out of Vancouver Canada by pushing Real Estate market overheated and thereby, to cause sharp rise in the cost of living, especially, the enterprises, the key cells of the real economy, are facing difficulty for survival.

Vancouver is losing the foundation for economic development.

The lessons of Japan's Bubble Economy 1980s may provide Canada a useful inspiration.

The over-heated real estate market pushed high price of the land, which caused the normal public construction difficult to continue. And also, there more and more social resources were put into such speculation; it has seriously impacted on the implement of the two basic national policies that carefully established after the WWII:

1. The Basic Farmland System that must maintain the amount of basic farmland to meet the food self-sufficient.

2. The Revitalizing Strategy by development of the industry and technology, which based on the consideration of that, Japan is a country that resources heavily depend on the imports and have to exchange by the goods that other country needed.

Therefore, Japanese Government purposefully issued the stringent retraction policies by one after another, especially, the land tax, to completely crash down the over-heated real estate market.

Nowadays, the decline of the economy of Japan, especially the decline of those enviable famous enterprises that once swept the world with their creative products, is not due to the improper policies that have crashed down the over-heated real estate market, and is not due to the wrongful business strategies, but, it is due to the degradation of the quality the most of Japanese people.

It is that speculative activity was as easy as free picking up money during the Bubble Economy to have nourished Japanese unearned ideological instead of the good quality of the hard-working, which making Japanese people contempt for hard work to make social production inefficiency.

Unearned speculation can completely distort the life-philosophy of people, to lure people addicting in opportunistic, addicting in pride of the luxury life. The worse, of those unearned Riches despise hard work for social wealth creation, and despise those who are hard working for social wealth creation.

The improper economic policies will provide a favorable environment for those speculators to push the real economy into rot.

The soaring rise in the cost of living pushed by real estate speculators is squeezing the real economy out of Vancouver.

The economic plight in Vancouver shows that Canada is facing a vital historical moment for economic strategy adjusting.

The motivation for this topic:

Recently, my university classmate came back from Vancouver, says that Vancouver housing prices are soaring, those who bought the houses are mostly working in the foreign countries, and the government of Vancouver can not get their income tax.

The information induced me to think of that, whether it is the federal government of Canada, or the local government of Vancouver, in many ways, all needs to make improvements.

For example, the naturalization conditions of Canada, for the people who apply for citizenship, it should not be just the time that they have lived in Canada, but, the income tax records in Canada. Without the income taxes for Canada, without the right to vote, and especially without the right to enjoy the benefits of Canada, such as, the free medical service, free education, and Government pensions, etc..

Because of, that enjoys social benefits without contribution is a behavior of unearned plundering to the fruits that created by hard working Canadians. It is not just the issue of social justice or social fair, but, it relates human civilization, it is an atypical barbaric civilization.

I appreciate the rational of the Government of Canada, in many aspects, especially that continuously adjusts the immigration policy. But, the frequent updating of the immigration policy also shows that it seems lack of a basic principle to follow. I think, the only correct immigrant standard, is that the immigration candidates must be smart and willingly hard-work, in proud of creating social wealth, and in the prime age.

For this purpose, my July 26, 2014 article Recruit employees by the quality of brain, not the academic degree may provide a good reference.

A country full of wealth-speculators and lack of wealth-creators, it certainly will be no hope. I hope that Canadian politicians are not only proud of the enjoyment of political privilege, but also proud of creating a good living environment for our children, grandchildren, a better Canada.

The overheated real estate market is fatal for the economy of Canada, for the survival of all Canadians, we must immediately take action.

Now, I excerpt some sections from my article in writing, in which take Japan's bubble economy 1980s as a mirror, to show the fatal effect of the overheated real estate market on economy.

1…Financial Economy is used for Plundering the Real Economy

The Real Economy, according to the Economy on Wikipedia, is the part of the economy that is concerned with actually producing goods and services, as ostensibly contrasted with the paper economy, or the financial side of the economy, which is concerned with buying and selling on the financial markets.

Intuitively say, that paper economy or financial economy is to make money by money.

A Mandarin article in discussion of the real economy said with that, the real economy that U.S. Federal Reserve Board (FED) frequently used is the part of removal of the markets of financial and real estate. Also, FED has excluded the core energy consumption from the real economy, on the grounds that the health of real economy often moves in the opposite to the energy prices.

Thus, the real economy that Fed so-called is often reflecting the Americans livelihood issues, food price index, the core consumer price index, inventory, retail sales, the operational state of a large number of industrial and commercial enterprises, which is relating to the issue of the corporate woes and national's sufferings.

I appreciate the rational and practical of the FED on the definition of the real economy. In the following topic, the real economy is consistent with that.

Today, there many social conflicts and crises are caused by that people's lives are increasingly difficult. In a large extent, the difficulties of life are caused by the over plunder of the financial economy on the real economy. In which process, the real estate has been taken as a easier tool and to be played a bad role under the fraudulent appeal - to develop economy.

The rapid flow of huge amount of the international hot money is legally plundering on the real economy with the power to easily destroy a nation's economy.

People will not forget the 1997 Asian financial crisis that gripped much of East Asia and raised fears of a worldwide economic meltdown due to financial contagion.

August 1997, in the article Currency "sabotage" should be an international crime, the writer Martin Khor said that:

“Dr. Mahathir said he was disappointed that while certain people championed human rights, the same people allowed those like Soros to undermine the economies of not just countries but regions.”

"’We have worked 30 to 40 years to develop our countries to this level, but along comes a man with a few billion dollars and who in a period of just two weeks, has undone most of the work we have done. And as a result, the people of our countries suffer.’"

"The Prime Minister said there was much talk about human rights and the protection of people, but the public ‘must be protected from people like Soros who has so much money and so much power and is totally thoughtless because he is not only hurting the people of Myanmar but the poor people in Indonesia, Malaysia, the Philippines and Thailand. These people suffer because the cost of everything has gone up.’"

Many lessons lesson us that the financial instruments developed to today, have been powerful enough to achieve an effect as that of a strong military power cannot achieved. Especially, the rapid global mobility of financial capital that is just easily by playing fingers has been boosting such speculative activities.”

The real estate is a part of the real economy. However, it is a wand with opposite magic that either can benefit or harm to the economy. In the financial economy over developed today, in most cases, it harm to the economy.

On one hand, due to the common sense of the real estate has a hedge against inflation with a better appreciation expectation, so people prefer real estate as a measure against currency devaluation. Therefore, it possesses the potential of attracting investment to drive the development of related industries to play a positive role in promoting economic development, even being taken as the indicator of the economic development.

On other hand, the overheated investment on the real estate easily pushes up the prices of housing and land, and thus to raise the operating cost of the industrial and commercial businesses, as well as the cost of people's daily life. Therefore, it possesses the potential of deteriorating economic environment to play a negative role of hindering economic development.

As the result, in some extent, real estate has been used as a kind of predatory means to plunder on the real economy.

If, we allow speculative real estate developing freely, in particular, the involvement of a large number of foreign hot money, is bound to damage the real economy as that of the hurricane to destroy living environment for the industrial and commercial enterprises and the life of the most of the locals.

We should not forget the painful lessons that Japan's bubble economy in 1980s and the financial crisis 2008 are both speculative real estate related.

Due to the suitable living climate, political and economical stability of the Canadian-based, Vancouver City is favoured by the real estate players. The negative impact of overheated real estate on the local economy is more and more prominent.

It is time to consider the seriousness of the problem and the proper response measures.

2. Speculators are squeezing city's builders out of Vancouver

In the morning, Apr. 14, 2014, I read the article <Foreign property buyers restrictions needed> and was moved by the rational views of Mr. Peter Ladner on the overheated Real Estate in Vancouver.

In Apr. 2011, he once told CBC News: "If our prices are being driven up by people who are simply investing in our community and not living here, there are a whole lot of problems that result."

He worries that prices are forcing people raised in Metro Vancouver to move elsewhere and preventing others from moving to the area.

In the interview with David Berner on Shaw cable television, 25 May 2011, Peter Ladner said that:

"I think about my own home that I bought in 2000, it's worth about four times what I paid for it now. … I have four kids, three in their twenties and one in their thirties, and they're never going to be able to afford to live in Vancouver because they're not already in the market."

"I heard a story, a company wants to expand, they need workers, they can not find them here, because all the young people here in somewhere else, because they can not afford for living here. They hire people, recruit people from Toronto and other area, the people take one look at house price and they say that I can not move here, so now the company in thinking about moving to Waterloo."

"We are declining the number of the companies in head offices in Vancouver. A survey on 60 CEOs about what keeps you from expanding and building the business here, the number one thing is the price of property, which is related. Number two is the shortage of skilled labors, which is also because of the housing cost."

"We also got the widening the Rich and Poor things, to disablize the society. And got cases were who move here, new immigrants, they want to move here work hard, make the way to get whole economic security, can not happen."

Video: Peter Ladner - Restrictions on Foreign Ownership

https://www.youtube.com/watch?v=Z5SAgli5Yww

Sep 24, 2013, Peter Ladner published article New business balks at Metro's affordable housing crisis:

“Lower housing prices are a dream for most of Metro Vancouver's business community and a nightmare for the real-estate-construction-home-financing consortium.”

“Vancouver mayor Gregor Robertson cites Vancouver's unaffordable housing prices as a top priority. Surveys of CEOs by the city's economic development commission have identified crippling housing prices as a top barrier to business retention, expansion and attraction. Stories abound of promising young employees leaving town and senior management recruits unable to move here.”

The worse is that overheated real estate is not just limited in Vancouver, Canada.

From above reports, we may clearly know the severity of the status of the Canadian real estate.

The facts lead me to think about the meaning of the development of real estate, in particular, the negative impact on real economy. For this point, the Japan’s Bubble Economy 1980s has provided clear lessons.

For the policy adjusting on real estate, in certain extent; it is a kind of social reform, and also it is a thorny issue. Therefore, there is a critical aspect that is the build of positive social ideological, with a rational social ideological atmosphere to nourish morality and entrepreneurial spirit of the social member, to motivate them to create dreamed lives by own wisdom and honest working, while creating a better social living environment.

In view of that, now, I would like to take up some length to discuss the lessons ofBJapan’s Bubble Economy in 1980s with some true facts.

Though, those are going to be mentioned incredible phenomenon occurring in the society and business of Japan is not entirely the consequence of the Bubble Economy, because of that there is the impact of general human nature universally.

The generation that created the economic miracle of Japan after WWII are mostly experienced suffering of War. They cherish the peaceful life and work hard. It is same in most countries.

However, for the serious decline of the economy of Japan, in comparison with other countries, the harm of the Bubble Economy on social moral, social ideological and people’s spiritual should not be ignored.

I hope that, by which, we can learn both of the lessons of the economic bubble and the corporate management, which is significant for solving current worry in Vancouver on excessive development of the Real Estate and much more significant is for mapping the future road of Canada where we are ling in to forge a foundation for a better life of our families – especially our next generation.

Canada should be built as a place where the decent people can live a decent life through social wealth creation by their talent and hard work, rather than the fairyland for the speculative predators.

3. The shocking lessons of Japan’s Bubble Economy in 1980s

There are many reflections on Japan’s Bubble Economy 1980s, they are mostly focusing on the macro policy and macro economy, today, I want to reflect on this issue from the micro perspective of the daily life of ordinary Japanese people, especially, the social moral and ideological. I will try to reveal that:

How did they involve into the speculation games of the real estate as that of the sleepwalker and until today they are still with the bitter fruit in mouth, to be exhausted, but can not spit it out, with it until to say bitter goodbye for this time life in this world.

How did the speculation games misconnect the nerves of Japanese brain, so that they have from the good quality of hardworking and rich in social responsibility, to be the quality of lazy and no social responsibility, which can easily be percept from the facts of the decline of Japan’s enterprises that were once swept the world with their products of full filled with the diligence and wisdom.

The information mainly came from the people of China who are studying or working after studying in Japan, and associated as good friends with Japanese people, so that they can exchanges in heart by heart with the compassion for Japanese friends and the warning for own motherland China. This may be the reason that such information can not be found in English.

On a Blog of China, there is a Mandarin post that talks about the ordinary Japanese people who are still suffering the sad consequences of wrongly speculating in Real Estate.

The writer Zhong Dao did not provide self-introduction, but from his narrative, I guess he is a man who works in Japan after studying in a graduate school of a Japanese University. More importantly, his work was real estate related, and thus he can view the matter from professional level and more valuable.

The post is from the daily experience plus his special surveys. I think that, the writer, may be called as an insider, the perspective is unique with special vision professionally, there is actual reference value for the current situation of Vancouver, especially, for planning sustainable development, even for the health development of whole Canada. So I excerpt and translate some as below.

The link of the Mandarin post of Zhong Dao is as follow:

http://blog.sina.com.cn/s/blog_50dccd000100g72w.html

3.1.. The Formation of Japan's Bubble Economy in 1980s

In the late 1970s, Japan's manufacturing technology on automotive and appliance developed a strong ability to compete with that of the U.S. and Europe, some manufacturers were among the world leader, and the products export to overseas in large quantities. It promotes the rapid rise of Japan’s economy.

After the economic reform and open up of China, the cars and appliances of Japan began to export to China in large quantities.

The Japanese, who have visited China, said with that: if China reaches the current technical level of Japan, it needs at least 30 years, China has 1.2 billion people, we can export stuff to China for many years. Therefore, many Japanese people believed that, in their lifetime, the economy of Japan will always be thriving.

At that time, despite the economic prosperity, the living conditions of Japanese people have not improved in the same step.

Since that prior to 1985, Japan's house is not fully commercialized. There more than 80% of ordinary working families are living in public houses, such as, the county barracks, the city barracks, and so on. In this period, the Japan Housing Corporation (JHC) was the largest residential provider, which was Gov.-funded in 1955.

Over-heated real estate is ruining Canadian economy from Japan mirroring Canada - 2 - 风萧萧 - Notebook of Frank

The Residential of JHC, the photo of the original article

Faced with the economic prosperity, in 1981, The Japanese government renamed the Japan Housing Corporation (JHC) as the Urban Renaissance Agency (UR), the core work transited into the construction and improvement of urban living and infrastructure from the directly providing housing, with the hope to take the chance of economic prosperity to commercialize the residential, thereby, to improve the living conditions while meeting the needs of residential personalization, as well as, to promote the sustainable development of the economy.

In 1985, with the "Plaza Accord" forcing appreciation of the yen, the money value of Japanese people suddenly increased at least 20%, which prompting the government to start accelerating comprehensive implementation of the residential commercialization. The Commercial Banks, inlarge quantities, grant loans for residents purchase with slashing down loan rates. Thus, the housing prices of Japan began a rapid climb.

Over-heated real estate is ruining Canadian economy from Japan mirroring Canada - 2 - 风萧萧 - Notebook of Frank

The changes in interest rates on bank loans

Thus, the bubble of Real Estate was quickly blowing up. The golden age of Japanese economy was emerging.

3.2. It was that Japan-Gov punctured the bubble purposefully

However, when the economic booming and most Japanese were madly busy of speculation in real estate market and with easily made unearned money to enjoy the prosperous with the life of luxury, in March 27, 1990, the Bank of Japan issued <Notice of Controlling the Total Financing Amount of Real Estate>. Later the Notice was known as the ignition point of the collapse of Japan's bubble economy. Then, the house prices and stock prices were both fell down.

Further more, in the August 1990; the Bank of Japan increased short-term lending rate to 6%. But, those were not enough; the worse was still coming, in 1992, the Finance Ministry of Japan has introduced a land value tax to further push down the overheated real estate market.

For the High-end retailing businesses, because, the shop is located in the city's most prosperous area, every year, the 0.3% land tax even valued 20% of commodity profits. The land tax resulted in a strong inhibition on the prices of the real estate.

Thus, the bubble of Real Estate was quickly deflating down in Japan. The golden age of Japanese was disappearing.

The restraining force of the land value tax on the real estate market was significant.

Why Japanese Government issued the policy of limiting the Financing Amount of Real Estate? Even. faced that the property market and the stock market has both started to crash down, in 1992, the Ministry of Finance still introduced the land value tax, to further crash down the market of real estate?

Many people deemed that, it was that, after 1990, a series of improper restricting policies on the real estate market have pushed the Japanese economy into the quagmire.

Well, whether the government of Japan was wrong?

3.3..Why did the Japanese Gov. punctured the economic bubble

In fact, the cause of the economic recession was not that of the policies issued after 1990, but, the policies for fully opening the real estate market in 1985 with the hope of maintaining the economy in high-speed development with the development of the real estate.

As earlier as the period of real estate market hot developing 1985 – 1989, Japanese government has realized the severity of the mistake of wrongly opening real estate market. Those policies after 1990 were for the emergent corrections rationally.

In 1985, the Plaza Accord further deepened the long worry of Janpanese people for the depreciation of the yen; they found that the real estate was the best way to hedge against inflation, with the fueling of the incentive policies of the government, the large sums of money invested in the real estate market.

In the eyes of the vast majority of Japanese people; the land has become the most worthy assets for maintaining the value of their hard-earnings. Since then, the nature of the real estate began to change, from the need of living to be developed as the tools of the speculators for profit.

Faced with such a large market demand, major Japanese banks launched fierce competing on loans for land. Typically, banks’ mortgage financing for land was about 70% of the evaluated value of the land, but, the loan of the Hokkaido Takushoku Bank even reached 120% of the land value.

In the eyes of Japanese people, the real estate was gold mine to dig madly.

With the rapid rise of the prices of the real estate, throughout of the Japan, the funds of investing in the real estate were more and more, the developing projects on real estate were more and more, and bigger and bigger.

In 1988, many years’ high profit of the real estate industry even attracted the leaders of the Japanese real economy also to invest in the real estate, such as, the Toyota, Fuji Heavy Industries, Hitachi motors, etc..

On the other hand, because of over-heated real estate speculation pushing high the price of the land, the second Tomei Expressway that was under construction difficult to continue, the operating conditions of the Japan Highway Public Corporation was worsening. Also, there various local public investment and construction were encountered difficulties.

The wild development of the real estate has seriously impacted on the normal development of the economy. Thus, the debating about how to develop of Japan was more and more intensive. In general review, these arguments were primarily around three aspects:

1. Whether the promotion of the development of real estate industry was in line with the basic national policy?

2. Whether the development of real estate industry was able to maintain the prosperity of the Japanese economy?

3. If the answer to both questions were "NO", then, what kind of economic model was suitable for Japan?

From the appearance, the collapse of Japan's bubble economy was caused by the series of suppression policies of the government of Japan; however, the essence of those policies was the clear answer of the government for the hot debating：

1. The promotion of the development of real estate industry did not comply with the basic national policy.

2. The development of the real estate industry could not sustain the prosperity of the Japanese economy?

After World War II, Japan coined two basic national policies that were the basic farmland system and the revitalizing strategy by the development of the industry and technology.

So called the basic farmland system was that Japan must maintain the amount of Japan's basic farmland to meet Japan's need for food self-sufficient. The over-heated development of the real estate was direct threatened to the amount of the basic farmland ensuring.

The revitalizing strategy by the development of the industry and technology was that, after World War II, faced scorched motherland, the Japanese government made a long argument on what develop-direction should be taken?. Once, considered to emulate the Netherlands as the trade hub between Asia, Europe and America, but, after the comparison between Japan and the Netherlands, either the number of the population and the external environment was far difference, so, the idea of the trade center was completely negated finally, and then, decided to take the development of the industry and technology as the developing policy.

Japan is a country that resources heavily depend on the imports. For obtaining needed resources, Japan must exchange by the goods that other country needed.

If, there more and more funds were invested in the real estate, the entire industrial structure and employment structure would tilt to the real estate industry, then, the manufacturing industries for earnings from export would decline continuously, and thus the needed resources that exchanged from other countries would be less and less

More worse was that, in the 10 years, 20 years later, with the rise of the developing countries, Japan, a country with no advantage of the price in products, even, the advantage in technology would be lost, too. Since there no goods can be used for exchanging resources with other countries. So, essentially, the competition of Japanese people on real estate was just as that of the poor villagers who were fighting for the adobe thatched cottages with no electricity, no heating, no gas and no oil, which was mindlessly struggling toward more poor.

Although, the businesses and the people are both inseparable from the land, however, how much the value of the land should account for the corporate profits? And how much should account for the personal income? In this world, for such question, there was no clear standard.

For the Japan, however, due to lack of natural resources, must use high-tech products to exchange, which was a firm commone consensus in Japanese society.

It was obvious that drove economy by developing real estate, was already departed from the unchangeable policy of revitalizing strategy by the development of the industrial and technology.

Luckily, the housing price of Japan has been led by Government since the establishment ofJapan Housing Corporation (JHC) in 1955 until 1985. So, there were enough social bases for Japanese government piercing the economic bubble.

3.4..The madness of the ordinary people during the bubble economy

In 1996, when Zhang Dao arrived in Japan first day of the first time, he associated with Mr. Sudo, a 48 years old Japanese man who was an administrator of a company that engaged in the management of commercial facilities with a monthly wage of more than 400 thousands yen. Zhong Dao was surprised with that, Sudo’s salary was not low, but also was a single, why did live in such a apartment of just over 30 thousands yen rent monthly, a bed room of 12 square meters, a kitchen of 4 square meters and a bathroom 3 square meters, with 5 people sharing a bathroom?.

Later, Zhong Dao learnt the reason, in the bubble economy booming period of 1988, Mr. Sudo bought a two-story villa with 60 million yen. Now, this villa price has dropped to 30 million yen. He rented the villa out and lived in this simple place, in order to save money, with the rental of the villa together to repay the bank's loan.

Over-heated real estate is ruining Canadian economy from Japan mirroring Canada - 2 - 风萧萧 - Notebook of Frank

The photo of the original article

Mr. Sudo has carefully counted that was only in this way, he would pay off the loan when his 65 years old, and then, he will mortgage the villa to get enough money for a decent sunset of his life. However, his wife was not willing to live in such a simple apartment and divorced to live with other man.

1997, Zhong Dao entered a graduate school and associated with doctoral Dong who was also from China and engaged in metal materials research. One day Dr. Dong drove him to a very desolate place to pick up persimmons.

Dr. Dong told him: here was his Mentor’s land that was bought in the bubble economy period, according to the development plan at that time, here should be in the commuter circle range of the Tokyo. Unfortunately, please look it now, still was so desolate, and maybe that was only my Mentor – a Professor engaging in the study of metal with a stubborn metal brain still believing that Tokyo circle will expand to here.

Dr. Dong said continuously: when making scientific experiments in the laboratory, his Professor was often soliloquizing about this land. This land seemed an annoying piece of his mind.

The professor bought this land in 1989 with 50 thousands yen/per square meter, a total of 150 million yen. His professor once said, now, if someone can bid 100 million, he would sell it out. In 1993, a people bid 25 thousands yen/ per square meter, his Professor refused, now, even 20 thousands yen/ per square meter cannot find a buyer. For these persimmon trees, his Professor had no time to take care of, they picked persimmons up was to help his professor in fact.

In China, there is gratitude tradition that student will respect own Mentor as the brother of own father to keep lifelong friendship. So Dr. Dong was sharing the happiness and the sadness of his Japanese Mentor.

Zhong Dao looked around the land once again, besides a dozens of persimmon trees; all was weeds, his exciting mood during driving to here be cooled down.

Over-heated real estate is ruining Canadian economy from Japan mirroring Canada - 2 - 风萧萧 - Notebook of Frank

The photo of the original article

In 2002, when investigating to choose a good place for a retail shop, Zhong Dao has a chance passed by here and was surprised by the old look as that of in 5 years ago. On the way, he specially went to a public library to have a check, the land was really planed as urbanization zone, but, now, it is still not ready to be construction site, due to it needs the investment of the government to be ready on water supply, drainage, liquefied petroleum gas, the roads that was over 5.2 meters width and other infrastructure that was essential for daily living.

The Professor bought this land here, probably based on the speed of the urban development during the period of bubble economy, the government will develop here as construction land within a few years. Then, as professor dreamed, land prices raised at least 100 thousands yen per square meter, and then, if it turned into the commercial use, 300 thousands yen per square meter was also possible. Unfortunately, the bet of the professor on making a large pile of money failed besides the success in gaining endless upsetting with the loss of money.

In 1999, after graduating from Tokyo University of Technology, Zhong Dao worked for a local company. In there he associated with 50 years old Kawase, a Japanese man who was a general engineer.

After graduating from the Tokyo Institute of Technology, Mr. Kawase came to work in the company, and became the company's core technical staff under age of 40. He has been work in the corporate headquarter in Shinagawa Tokyo and made great contribution for the development of the company, his basic wage reached nearly one million yen.

However, in 1985, the early stage of the formation of the bubble economy, Kawase resign founded a residential production plant. On the start, the development was very successful. In 1988, Kawase was not only loans to expand the production scale, while also bought a first-class luxury apartment in Tokyo with nearly 200 million yen.

Unexpectedly, in 1990, the economic situation worsened, the orders of the plant were almost zero. Kawase pledged the apartment to the bank with 100 million yen with hoping the plant survival. However, the plant eventually went bankrupt in 1997. The executive of his former work-company considered with Kawase’s capability and many years of personal friendship to let him back to the company, but he could not go back to headquarter with the wage of only 400 thousands Yen.

3.5..High-quality of Japanese people before Bubble Economy

Now, I think of a story in Mandarin long time ago, the famous American marketing authority Philip Kotler who once said that: For Japan, what is the panacea to heal its wounds of the war, to stand up on the war-ruins, and to become the economic powerhouse? For achieving economic advantage, Japanese waged the war, but, failed. From the pain, they learnt that, the use of economic means can achieve more brilliant achievements than that of the use of the military. This means is the marketing.

The economic miracle shows the high-quality of Japanese people. Following is a story about it.

In morning August 19, 2013, I had a chat with the father of my new neighbor. He said that his brother once was a top executive of a Canadian Steel Manufacturer and had twice visited to Japan for learning the experience of the advanced corporate management in 40 years ago. His brother appreciates the good quality of Japanese very much with a comparison between Japanese and Canadian in case of production accident.

When facing production equipment fails, any Japanese operator would immediately stop the production, and then, all of the people gathered together to make diagnosis and treatment, after troubleshooting, everyone immediately went back own position to resume the production. But, the Canadian was just blindly standing, there no one was attempting for troubleshooting.

Following are some memories about the industrious noble quality of Japanese people. I could not recall the source of them already, but the facts are true.

When 1973 oil crisis, the plant of the Sony Corporation was shutdown and the workers were staying home waiting for notification of work. However, the workers went back to plant to do some thing available volunteerly with the hope that company could survive.

Mr. Kazuo Inamori, the founder of Kyocera Corporation of Japan. In the newly established period of the company, an customer ordered special shape of water pipes, because there was no prior experience in the production of such pipes. In the process of heating and forming to required shape, the water pipes were burst. Then, Kazuo Inamori was holding the pipe when sleeping at night and slowly turning the pipe, so that pipes was heated evenly, and made it into required shape finally.

Now, we have convinced that it was that industrious noble nature of Japanese people created Japan's postwar economic miracle.

Now, let’s look at that new developed incredible poor quality of Japanese people, which was nourished from the profiteering zealortry during bubble economy.

4..The horrors after the Economic Bubble burst

In the article Japan’s Bubble Economy of the 1980s June 4, 2012, the economic analyst and Forbes columnist Jesse Colombo wrote with that:

"By 2004, residential real estate in Tokyo was only worth of 10% of its late 1980s peak, while the most expensive land in Tokyo’s Ginza business district had fallen back to just 1% of its 1989 level in the same year (Barsky, 2009)."

"Similarly, the Nikkei stock index is now trading around 10,000, just little over a quarter of its all-time high."

"It has been over two decades since the popping of Japan’s economic bubble and the country is still actively battling with deflationary forces that are so powerful that near-zero interest rates, repeated bouts of quantitative easing (some call it “money printing”) and constant Yen-weakening currency interventions have barely made a dent."

Jan 6, 2009, on the Japan Times, the report <Lessons from when the bubble burst> said with that: after the crash in late 1990, economic growth stalled various government-sponsored fiscal and economic stimulus measures, including trillions of yen in failed public works projects, did nothing to revive the economy. This was started roughly in 1991, when the effects of the stock market crash became clear.

Mar 09, 2014, Japan's deficit hits record as economic growth slows.

Mar 31, 2014, Japan factory output contracts, dims growth outlook as tax hike looms.

Apr. 28, 2014, IMF says Shinzo Abe’s economic policy is losing momentum and warns growth could stall unless structural changes to the economy are made.

Above information reveals the terrible consequences of Japan's bubble economy, Prime Minister Shinzo Abe economics seems not work but with a side effect to press Japanese economy continuously toward deterioration.

4.1..Bubble Economy degenerated the quality of Japanese

Why the all of the fiscal and economic stimulus measures has been used, but have gained nothing to revive the economy?

When talking about the main cause of Japan’s declining from the economic powerhouse? Most people would blame the Plaza Accord that forced appreciation of the Yen to cause Japanese products losing competitiveness and the Bubble Economy.

The reason, as my view, all of those stimulus measures are from the macro elements of the economy, with ignoring the most basic micro elements - the quality of the people, the work-ethic of the labor, the efficiency of the production and the capacity of the innovation.

The Bubble Economy has rewritten the code of the DNA of the quality of Japanese people, from enthusiastic in hard working into enamoring in greedy speculating, thus, further affected the social moral and national’s spiritual, thereby cause the decay of whole society of Japan.

The easy gaining excessive profit from speculative activities have fueled Japanese speculative mentality with unearned ideological. It entices people keen to make living by speculating instead of hard working and less concerning on the interest of own company and most of Japanese people have lost the entrepreneurial spirit, hard-working spirit, and the rational sense of social responsibility and enterprises have deteriorated as lack of enterprising spirit and innovation dynamicI, such negative impact is more terrible, even fatal.

In essence, the national is the decisive factor for a nation’s economic development; a nation's economic decline is the decline of the quality of its national.

Whether it is a business or a country, if its member is full of concerning for the self interest, without or lack of concerning for the public interest, it will doom to be extinction.

So, I firmly believed that the impact of the Bubble Economy on the economy is just a curable social flu, but, the impact on the national’s spiritual is incurable social cancer.

The fact of the Japanese companies loses competitiveness and falling into declining are the vivid proof. The shortsightedness and lack of entrepreneurial spirit of the management team, the lack of work enthusiasm of the employees is the main reason, and also it caused Japan's economy cannot recover as expected.

4.2..A Shocking Story of Incredible Lazy

An engineer of China who works for a German company in taking charge of the branches in South Korea, China and Japan, after working a while in Japan, he was shocked by the lazy of Japanese employees, and completely lost the good impression for them.

Then he wrote an article post on the website and to be widely reproduced on the internet. I excerpt and translate some as follow. For facilitating narrative, here, I name the writer as Jim.

The Japanese employees are working overtime almost every day, but, only for getting overtime pay rather than for the need of production.

Jim arranged a simple task to a Japanese technician who dragged two days to finish. The same work, if, in China, a new graduated young man can finish just in half an hour.

In a break time, Jim complains the matter with German colleagues, one German said, this guy is a good one, since he did not drag for a month as that of others. Another German even suspected that Japanese employee was dozing when working.

Japanese employee did not like to take responsibility, when encountering some work trouble, usually; they will look for helping with endless complaining.

German company plans to open new production lines in Japan, so, sent Japanese staff to Germany for training. The same project in China, within a year, production lines was already operating at full capacity in three shifts for 24 hours a day. But in Japan, it took two years still in the state of machine commissioning.

The workers of China have mastered all the skills within the three months training in Germany. The German teacher said: you have learnt every thing on the training plan, you may go back to China now, and we have nothing for teaching any more.

Japanese spent six months in Germany, but, after went back to Japan; they could not work properly, and complaining that Germans did not teach them well. Germans angered with that: in Germany, we were teaching you hands by hands, and you also said that you have mastered every thing already. The Japanese fought back immediately: Sorry, we forgot, our memory is too bad to remember that.

Germans were angered and collectively applied for vacation to leave Japan as a protest. The German company had to allow them to China by the name of studying for appeasing their anger.

Jim went back China with the German colleagues together. When they held a cup of coffee to watch Workshop through the window glass of the upstairs office, the production was in an orderly busy, workers were loading and unloading on the production line, the transportation-cars were running to and fro between the production sites and the storages.

All of Germans was shocked and some even exclaimed with that: my God, here is simply a heaven. One of them said with that, they (Japanese) have been sleeping for 20 years, let them sleeping for another 20 years, then, Japan will decline as a developing country, and while, China will destine to be a developed country.

Now, in many Japanese companies, employees are mostly 40-50 years old, rarely under 30. Many young Japanese are staying in unemployed. Besides the cause of the economic recession, the other cause is Japan's "special" corporate culture, which emphasizing work-qualifications and work-records, so that young Japanese have lesser work chance. Some girls have to do "compensated dating" for making money. Some boys also have to make money by doing “duck” - male prostitute.

Following, let’s look at the reason for the decline of Japanese corporations following the eyes of Mr. Kondo Daisuke.

4.3..Japanese Disease - Evading Responsibility ruins Sharp Corporation

Sharp Corporation founded in Sep. 1912, Headquartered in Osaka, Japan. It is a multinational corporation that designs and manufactures electronic products with around 55,580 employees worldwide as of June 2011, with ranking as the fifth-largest television manufacturer in the world, after Samsung, LG, Sony, and Panasonic.

But, in recent years, Sharp Corporation declines as same as that of many other Japanese companies.

Sep. 11, 2012, Daisuke Kondo who published a Mandarin article Angry Gou Tai-ming on Economic Observer Online of China, in which he criticized the “Japanese Disease” that harms Japanese companies. I excerpt and translate some as follow.

A hundred years glorious Sharp Corporation has suffered "Japanese disease." It is not only the Sharp, but the Sony, Panasonic, NEC, Sanyo, Olympus, and great many Japanese companies are the serious patients in "Japanese disease".

The nature of the "Japanese disease" is the manner of "evading responsibility" that evolved rigid organizational structure and Inward Oriented Conservative of the Japanese Companies. The direct result of the "Illness" is that illed-companies will increasingly debilitate and ultimately collapse.

For example, a Japanese company planned to develop a new product. The product development department produced a "plan book", with depicting the grand blueprint of best market potential.

However, when the "plan book" spreading in other departments of the company, this new product would face with dozens or even hundreds of blames, in the end, it did not get any support. The reason is simple: For the heads of departments, the most important thing is not how to bring new products to market, to improve the turnover, but, how to avoid the risk-taking of affecting own career in case of the sales of the new products is not good as expected.

Because of the whole company have infected the disease of "evading responsibility", a lot of great new product plans have been put into the limbo. Meanwhile, in the process of this "bad model" iterative, the staff for new products’ R & D has gradually lost enthusiasm and morale, thus, resulting in the number of the plan for new products’ dropped. Nevertheless, the whole company still does not repent for that, keeping on its own way.

In the March 2012, Sharp's financial accounts (The fiscal year starts in April in Japanese companies) exposed huge losses. It shows that the decline of Sharp continuously with accelerating and doomed to bankrupt within one year.

At this point, dying Sharp ushered in a Savior, after mutual consultation, the founder and chairman of Foxconn, Gou Tai-Ming is willing to pay for acquiring 9.9% stake in Sharp Corporation.

However, 5 months later, in the afternoon Aug. 30, 2012, in Sakai City factory of Sharp Corporation located in Osaka, came out an angry voice: "why do you Japanese take so long time to make a decision? Are you really going to rebuild the company? "

Face the raps, Sharp president Takashi Okuda and his management team heads down and keeps in silence as that of the pupils being reprimanded by their teacher. "Finally, I am again, to accept our request or not, you are better hurry to consider clear!"

After that, Guo immediately takes a private plane to leave Japan. For his sudden departure, more than 100 media reporters look at each others; and do not know what to do.

Once cooperation with a Japanese business that suffers "Japanese disease", I believe, regardless, which leaders of China's company will be angry as same as that of Gou Tai-Ming.

Assuming, a Chinese company raised an advantageous cooperation projects for both sides to a Japanese company, the local subsidiary of the Japanese company will immediately report to the International Department of the Japanese parent company. At this time, the International Department will require the local subsidiary to present a "plan book" as long as hundreds of pages. Just for completing this "plan book" will be going to spend a few months of time.

Then, after the negotiations with various departments in the head office, which cost more than six months usually, luckily, the "plan book" may finally appear on the meeting of the Board of directors once a month in the head office. However, most probably it will suffer the fate of being sentenced to death, because of all the directors are not concerns the plan book from its feasible or not, but, from the "how to use the plan, for their personal interest, rather than the interest of the company.

If, some directors believe that the implementation of the plan was no benefit for them selves, or own competitors in the company can get more benefits, they would oppose without hesitation and then put forward some reason to postpone the decision and ultimately to make the plan was dismissed or forced to ‘another day another meeting’, without the rational sense of caring about the interest of gaining or losing for the company."

It is not only Gou Tai-Ming, but, there no any boss will patiently wait for so long. When asking Japanese side a result, the answer is "still under studying." So, facing the brink of bankruptcy, the Sharp is still in the long "studying", the angry of Gou Tai-Ming is natural and reasonable.

4.4..The ridiculous management ruins Sony Corporation

Feb. 6, 2014, Mr. Daisuke Kondo published another Mandarin article <The sundown of Sony:Doraemon or Crayon> on a website of China, in which he criticized the ridiculous management that has been ruining Sony Corporation.

I excerpt and translate some as follow. When I translating this article, I was shocked and produced a feeling of that Sony's management is simply absurd. It warns us to review that whether have similar behavior in Canadian companies?

Now, let us to see the reason of the decline of the Sony Corporation with the narrative of Mr. Daisuke Kondo.

Feb. 6, 2014, Kazuo Hirai, the president of Sony Corporation declared: "Due to 110 billion yen huge deficit in 2013, the company will lay off 5,000 people in the coming year, while fully stop the production and the R & D of Sony VAIO-PC.

I remember that of my college days, only the best students in science majors can enter Sony. When going out of Japan, regardless of which country, we were able to see "SONY" huge billboard and young people using "walkman". At that time, Sony is our Japanese pride. However, now?

For this problem, one of my college classmates, now a Sony employee replied with that:

"In the company, there one by one meetings are from morning to night, after the meetings, everyone must deal with at least 100 internal mails from the company. So, Sony is not an electronics manufacturer, but a downright bureaucracy! Only those people, who are the 'Mr. Nice Guy' without any faults, could be promoted. Such a Sony could not develop new products that can shine the world any more?”

"Our company has a specialized team in charge of new product development against the rival of Apple of the United States. There was I admired executive who is in charge of the team. One day, his immediate leader of a director of Board even ordered him to stop the investment of 'no value' (ie, to give up the R & D) as soon as possible to vanquish to Apple. The executive retorted: Do you have self-esteem as a member of Sony? The Director even contemptuously asked: ‘your self-esteem can help company making money, right? Heard of the answer of a director of Board, the executive immediately decided to resign."

In recent years, the elite who left Sony were not only the executive alone. In 2006, the former managing director who was responsible for "AIBO" R & D of futuristic robots was demobilized; the reason was that there members of board were questioning that ‘How much economic benefit that the robot R & D can bring to Sony? In 2007, former chairman and CEO of the Sony Computer Entertainment Inc., Mr. Ken Kutarag who known as the "Father of the PS (PlayStation)" was also retired after the expiry of his Job tenure.

In the booming period of before, Sony company once gathered a large number of "Doraemon" talents - they can come up with all kinds of whimsy from their "Mind Treasure Bag", and then to materialize them into a variety of future products. But now, unfortunately, the Sony is filled with the people who work with lips only as that of the "Crayon"

Thanks Mr. Daisuke Kondo for his careful observation and artful description.

From above lessons, I firmly believed that, no doubt, such Japanese diseases of the employee lazy, the "evading responsibility", and more, is an objective results of the Japanese subjective selfish ideological, which was developed from the Holy Baptism by Japan’s Bubble Economy 1980s.

Because of that, if, before the Japan’s Bubble Economy, the Japanese people and the companies had infected these kind diseases, the Japan would never be developed as the economic powerhouse.

The aftermath of the bubble economy is still hurting all aspects of Japanese society, from the social ideological to the personal spiritual, from the macro national economy to the micro family life, from the world class companies to the ordinary employees, and more.

The sad facts of Japan made me firmly believed: it is that national’s quality decides the fate of the nation. And it is that social moral, social ideological impacts the quality of the national in a great extent.

Japan, one misstep in opening real estate market, can not get rid of the nightmare of the bubble economy.

Vancouver, Canada must remain sober on dealing with real estate market.

In view of the terrible lessons of Japan, whether we should follow the suggestion of Peter Ladner to directly introduce restrictions for foreign property buyers to avoid what happened in Japan by cooling down Vancouver’s over-heated real estate?

Of course, the restriction as Peter Ladner suggested is necessary. However, in consideration of the terrible lessons of Japan, we should design a proper solution to prevent the heavy side effect of the restriction. This is significant, but a thorny issue.

If we throw ourselves into effort, any problem will have a suitable solution. I will discuss it in other article.

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Some artcles about overheated realestate of Canada

Peter Ladner: ideas for a better Vancouver Canada

Future economic environmental vision from generation Next

ROB CARRICK Why Canadian homes are more unaffordable than ever

ROB CARRICK The rise of the miserable Canadian homeowner

ROB CARRICK The hidden trap of mortgage penalties

Costs and competition heat up in Canadian real estate financing

http://www.biv.com/costs-and-competition-heat-up-in-canadian-real-estate-financing

New business balks at Metro's affordable housing crisis

How development can help improve local farmland productivity

Harper dismisses reports of a Canadian housing bubble

High housing costs boost inequality, OECD tells Canada

The perils of a recovering U.S. economy: Don Pittis

Housing market can withstand gradual 2% mortgage hike: BMO

Fears of a housing bubble in Canada overblown, report says

Stephen Poloz sees high home prices as economic risk

High housing costs boost inequality, OECD tells Canada

http://www.biv.com/article/20131008/BIV0319/131009946/0/biv

Asian economy slowing down, but B.C. exports to China and other key trading partners still rising

Natural resources continue to top the province's exports to the Far East, but opportunities in agriculture and education are growing

http://www.biv.com/article/bc-exports-to-china-and-other-key

Investment expert sees signs of an overstretched market despite solid growth since the mid-1990s

http://www.cbc.ca/news/business/housing-market-a-bubble-set-to-burst-hilliard-macbeth-says-1.2784511

Lower housing prices are a dream for most of Metro Vancouver's business community and a nightmare for the real-estate-construction-home-financing consortium

http://www.biv.com/article/20131001/BIV0319/310019934/-1/biv/future-economic-environmental-vision-from-generation-next

Vancouver’s Skyrocketing Housing Prices: Are Mainland Chinese Investors To Blame?

http://www.ibtimes.com/vancouvers-skyrocketing-housing-prices-are-mainland-chinese-investors-blame-1510934

Non-Residents purchasing property in Vancouver.

http://www.peterraab.ca/nonresinfo.html

Think house prices are unaffordable now? It gets worse

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/in-2024-all-homes-will-be-dream-homes/article16246770/