China’s 32nd province?

Chinese investors show their interest in purchasing condos in a resort town on Jeju Island in 2011.

It is human nature to travel overseas when you have the time and money. During the Lunar New Year holidays, about 500,000 Koreans left the country for overseas travel, while 6 million Chinese traveled overseas. But there is a clear difference between the two countries. Most of the Korean tourists are having leisure time, while over 40 percent of the Chinese tourists are traveling overseas for entertainment and real estate shopping.

According to juwai.com, the Chinese real estate website, 41 percent of the Chinese planning overseas trips during the holidays said that they were doing so to invest in foreign properties. During the holidays, 140,000 Chinese tourists visited Korea and 56,000 are coming to Korea with an intention to buy property, according to the statistics.

It is not news that the Chinese people are buying property in Korea. Their investments are concentrated on Jeju Island, and 0.5 percent of the island — 8.53 million square meters (2,108 acres) — is owned by Chinese. The figure has gone up six times over the past five years.

Because of the recent friction between the two countries over the planned deployment of the Terminal High Altitude Area Defense (Thaad) anti-missile system, such investment slowed a bit. The Jeju authorities are also instituting measures to stop real estate speculation by restricting the real estate investment immigration zones. And yet, the Chinese people’s mania for real estate purchases will not change easily, so their passion to buy Jeju properties will reignite anytime soon.

Chinese real estate investment fever also hit Japan. Their focus is Hokkaido, a place similar to Jeju Island in many aspects. Both places are known for their scenic beauty. They are also large islands far from the mainland.

But there is a critical difference. While Jeju promised permanent residency status to Chinese people to boost real estate investments, Hokkaido was more cautious about giving out green cards.
In Japan, the Chinese investment in real estate in Hokkaido was perceived warily. It is perhaps because of serious China-Japan friction in the past, but the Japanese people approach the Chinese purchases from the perspective of national security. They are particularly concerned that the national security of Japan would be threatened if the Chinese purchase land near military installations. If Chinese agents, disguised as investors, build houses and monitor military facilities, that certainly is a serious threat.

The Japanese people also think the Chinese purchases of land in Hokkaido — a major drinking water supply source for Japan — could become a serious issue in the future. Few doubt that water will become an important strategic resource.

It was also pointed out that the Japanese people are not allowed to purchase any properties in China, while the Chinese are buying up properties freely in Hokkaido. Under its Communist policies, no private ownership of property is allowed in China. Properties are available for rent only. Foreigners, of course, have to rent properties. Japan, therefore, argues that the real estate investments in the two countries are imbalanced. Hokkaido authorities will soon ask the central government to regulate Chinese purchases of property.

We must consider these Japanese concerns in Korea. First, Gangjeong Naval Base, intended to play a role in checking China influence, is located on Jeju Island, but we do not see this as a security issue. Resorts built by Chinese investors have long been polluting the drinking water resources at Mount Halla. While the Chinese are freely purchasing real estate properties in Korea, Koreans cannot buy any land in China.

In October, the Hangzhou Daily published an article saying that Hokkaido could become China’s 32nd province in 10 years. We must not laugh. Jeju could suffer the same destiny.

JoongAng Ilbo, Jan. 31, Page 26

*The author is an editorial writer of the JoongAng Ilbo.

Nam Jeong-ho