The recent tightening of rules for foreign investment in the Australian residential market include: for temporary residents to be able to buy a property, they have to be first screened and get permission from the Foreign Investment Review Board; they are required to sell their property when they leave the country; in the case of vacant land, they must either build on it within 24 months or sell it.

Wealthy Mainland investors have been accused of contributing to the property market bubble in Australia and are blamed for causing young Australians to be priced out of the property market. The recently announced move is a reversal of the relaxation of foreign ownership rules that came into effect only 18 months ago.

The new rules are by no means toothless, as they are backed up by punitive measures that include: making it easier to fine real estate vendors and confiscate capital gains, improving the monitoring system to facilitate enforcement, and setting up a hotline for reports of suspicious dealings.

“There have been anecdotal claims of foreign investors - especially wealthy Chinese families – ‘stockpiling’ Australian houses and leaving them idle, and of outbidding young people at auctions.

Chinese buyers have been involved in near-record high purchases including an apartment in East Melbourne and a house in Sydney.

Treasury is investigating 50 suspicious cases in Melbourne with those caught facing fines and jail.”

Australian Prime Minister Kevin Rudd reportedly said: “We want to make sure that Australian working families are not being priced out of their own family homes. We want to make sure that foreign investors are not going to force up prices for Australians seeking to buy their own home, buy their first home, and we think that’s the right course of action.”

On the other hand, residential houses are hardly the only type of Australia property the Mainland Chinese are interested in. A news report says that Chinese investment in large-scale cattle farms in Australia has seen a ten-fold increase in the last six months.

Some communities are concerned that the Chinese investors in farms may be more interested in the minerals underneath the farms than their agricultural production.

Leader of the opposition, the National Party, voiced his concern about Chinese government-owned entities participating in the market and what their motivation is.

The whole thing seems to have an ominously familiar ring to it. In the 1980s, the Japanese went overseas and made similar news headlines when they “invaded” the American market and snapped up a big slice of Manhattan real estate. They mesmerized the Americans into believing that wealth churned out from their powerful “Zaitech” was boundless, in much the same way as Mainland Chinese are now persuading the world that they are armed with unfathomable liquidity created under socialism with Chinese characteristics to buy up whole chunks of their host countries’ assets.

The Japanese have learned their lesson. As to how the Chinese story will end, it is anybody’s guess.

Hopefully, Donald Tsang will take his cue from the Australian Prime Minister’s statement and do the right thing for Hong Kong citizens seeking to buy their first home. But he’ll probably use the excuse that Mainland money is not foreign money.