How climate scepticism turned into something more dangerous

The long read: Doubts about the science are being replaced by doubts about the motives of scientists and their political supporters. Once this kind of cynicism takes hold, is there any hope for the truth?

Last month Donald Trump announced his intention to withdraw the United States from the Paris climate accord. For his supporters, it provided evidence, at last, that the president is a man of his word. He may not have kept many campaign promises, but he kept this one. For his numerous critics it is just another sign of how little Trump cares about evidence of any kind. His decision to junk the Paris accord confirms Trump as the poster politician for the post-truth age.

But this is not just about Trump. The motley array of candidates who ran for the Republican presidential nomination was divided on many things, but not on climate change. None of them was willing to take the issue seriously. In a bitterly contentious election, it was a rare instance of unanimity. The consensus that climate is a non-subject was shared by all the candidates who appeared in the first major Republican debate in August 2015 Jeb Bush, Scott Walker, Ben Carson, Ted Cruz, Marco Rubio, Rand Paul, Chris Christie, John Kasich, Mike Huckabee and Trump. Republican voters were offered 10 shades of denialism.

As Huckabee quipped in January 2015, any talk of global warming was a distraction from the real dangers the country faced: A beheading is a far greater threat to an American than a sunburn. Trumps remarks on climate may have more been erratic (I want to use hairspray! he said at one point, confusing global warming with the hole in the ozone layer) but their consistent theme was that manmade climate change is a hoax, perpetrated by the enemies of the US, who may or may not include China.

Climate science has become a red rag to the political right. The scientific consensus is clear: more than 95% of climate researchers agree that human activity is causing global warming, and that without action to combat it we are on a path to dangerous temperature rises from pre-industrial levels. But the mere existence of this consensus gets taken by its political opponents as a priori evidence of a stitch-up. Why else would scientists and left-leaning politicians be agreeing with each other all the time if they werent scratching each others backs? Knowledge is easily turned into elite knowledge, which is tantamount to privileged snobs telling ordinary people what to think. Trumps stance reflects the mutual intolerance that now exists between those promoting the scientific consensus and those for whom the consensus is just another political racket. Trump didnt create this division. He is simply exploiting it.

It is tempting for anyone on the scientific side of the divide to want to apportion all the blame to the alt-facts crowd, who see elite conspiracies everywhere. But there is more going on here than dumb politics versus smart science. The facts are not just the innocent victims of politics. The facts have long been put in the service of politics, which is what fuels the suspicions of those who wish to deny them. The politicisation can cut both ways.

The politics of climate change poses a stark dilemma for anyone wanting to push back against the purveyors of post-truth. Should they bide their time and trust that the facts will win out in the end? Or do they use the evidence as weapons in the political fight, in which case they risk confirming the suspicion that they have gone beyond the facts? It is not just climate scientists who find themselves in this bind. Economists making the case against Brexit found that the more they insisted on agreement inside the profession about the dangers, the more it was viewed with suspicion from the outside by people who regarded it as a political con.

Post-truth politics also poses a problem for scepticism. A healthy democracy needs to leave plenty of room for doubt. There are lots of good reasons to be doubtful about what the reality of climate change will entail: though there is scientific agreement about the fact of global warming and its source in human activity, the ultimate risks are very uncertain and so are the long-term consequences. There is plenty of scope for disagreement about the most effective next steps. The existence of a very strong scientific consensus does not mean there should be a consensus about the correct political response. But the fact of the scientific consensus has produced an equal and opposite reaction that squeezes the room for reasonable doubt. The certainty among the scientists has engendered the most intolerant kind of scepticism among the doubters.

Not all climate sceptics are part of the alt-right. But everyone in the alt-right is now a climate sceptic. Thats what makes the politics so toxic. It means that climate scepticism is being driven out by climate cynicism. A sceptic questions the evidence for a given claim and asks whether it is believable. A cynic questions the motives of the people who deploy the evidence, regardless of whether it is believable or not. Any attempt to defend the facts gets presented as evidence that the facts simply suit the interests of the people peddling them.

Climate change is the defining political issue of our times and not simply because of the risks we run if we get it wrong. An inadequate response if we do too little, too late could inflict untold damage on the habitable environment. But even before that day comes, the contest over the truth about climate change is doing serious damage to our democracy.

The fight over climate reveals how easily politics can get in the way of the facts, and how hard it can be to escape once cynicism exerts its grip. In many ways, climate science is particularly vulnerable to political distortion. But the issue of climate change also shows that it is a false comfort for liberal elites to think that the facts will win in the end. If they do, it wont be because we woke up to the science. It will be because we woke up to the politics.


Climate science has not always been so political. The idea that manmade carbon emissions are contributing to significant changes in the climate first came to public notice in the 1960s and 1970s. But attention to the issue was not primarily driven by politics, despite an attempt by Richard Nixon when president to push for more research into the issue. Most of the early consciousness-raising came from journalists.

In 1975, Newsweek made a splash with the claim that the science of climate change was pointing to the imminent threat of global cooling. This warning gained notoriety but little political traction, at a time when the dangers of nuclear war and the economic consequences of the oil crisis crowded out other forms of apocalypse. The political consequences had to wait decades to be felt. Many of the recent Republican presidential candidates cited over-the-top scare stories about global cooling from their childhood as a reason to discount scare stories about global warming today.

What politicised the idea of climate change was its adoption as a cause by Democratic politicians in the 1980s, above all by Al Gore. By the start of that decade, evidence of global cooling had faded and a scientific consensus was starting to form around the idea that the climate was warming up. Gore belonged to a group known as the Atari Democrats, for their wonkish attachment to science and technology. These politicians saw climate as a useful issue, as well as an urgent one. It was a way of appealing to moderate Republican voters, because the concerns it raised cut across party lines. In the words of another member of the group, Chuck Schumer, then a Brooklyn congressman, now Senate minority leader: If youre a Democrat, especially in a middle-class district or on the west coast, [climate] is a great issue It is an issue with no downside.

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Former British Conservative prime minister Margaret Thatcher, who in 1989 called global warming one of the most serious threats facing humanity. Photograph: Dave Caulkin/AP

The ecumenical quality of climate change as a political cause was emphasised when Margaret Thatcher took it up at around the same time. In her speech to the UN general assembly in 1989, she spoke of global warming as one of the most serious threats facing humanity. She was comfortable speaking the language of science, having been a scientist herself. But her motives were political: it suited her prior point of view. She drew extensively from the warnings of the Scott Polar Research Institute in Cambridge, in part because she had grown to trust their advice on climactic conditions during the Falklands war. She believed in nuclear power as an emblem of free enterprise. And she had historic reasons to be suspicious of coal. For Thatcher, climate change was a convenient truth.

But no issue, once politicised, remains ecumenical for long. In 1989 Thatchers time was nearly up. Gores was just beginning. Through the 1990s and 2000s, as climate change became associated with left or liberal policy positions, it started to receive serious pushback from the right, for whom the political motivations of those championing the science were obvious. Climate change was seen as a vehicle for promoting big government and higher taxes. It became a totem of the partisan divide.

This was the beginning of a vicious circle of mutual distrust. Once science gets dragged into the territory of politics, its opponents can accuse it of being a distortion of science. Scientists are meant to be politically neutral, at least as far as their science is concerned. Yet it is almost impossible to remain neutral when you are under political assault.

In these politically charged circumstances, there is no safe space for the facts to retreat to. That was made clear by the so-called climategate scandal of 2009, when a series of hacked emails from the University of East Anglia was held up as evidence that the scientific evidence was being distorted to fit a political agenda. The emails showed no such thing. What they did reveal is that in an environment of highly politicised scepticism, climate scientists were forced to think about guarding the evidence against opponents looking for any excuse to discredit it.

In private correspondence, the UEA scientists talked about presentational tricks for describing the data and the need to favour certain outlets for publication over others. They looked out for their friends and they were wary of their enemies: thats politics. There was nothing wrong with the science, as was confirmed by an extensive series of inquiries into the affair. But the emails betrayed the scientists awareness that the idea of a consensus on manmade climate change was under concerted attack. So they went out of their way to shore up the consensus. Which, when revealed, confirmed to their opponents that the consensus was a sham.

This is how climate scepticism becomes climate cynicism: doubts about the evidence are replaced by doubts about the motives of the people using it. In 2012, Senator Jim Inhofe, a Republican who once brought a snowball on to the floor of the senate to show that climate change wasnt real, published The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future. The book contains two lengthy appendices. The first is the full transcript of the UEA emails, presented as prima facie evidence that the science is a fix. The second is a history of the United Nations global development programme. The argument goes like this: there is no need for world government unless there are issues that cant be solved by national governments. Climate change is such an issue. So it follows that it has been invented by people who cant justify world government any other way. It is a globalist plot.

Once cynicism becomes the default mode of attack, then both sides are trapped. Moreover, it is not a level playing field. It favours the cynics. Scientists have to decide whether to let the facts speak for themselves, or whether to try to take on the cynics at their own game. If they pull back from politics, they risk letting the cynics set the agenda. If they dont, they risk proving the cynics right.


Cynicism is fuelled by the ease with which uncertainty about the science can be spread. All it takes is time and money. Questioning climate science suits the interests of the fossil fuel industry, where the politics of climate change has long been seen to pose a direct threat. Ever since climate became a political issue in the 1980s, the big oil companies have been funding an extensive PR operation to raise questions about the strength of the evidence. ExxonMobil alone has spent more than $240m on public relations in this area in the past two decades. Many of the leading Republican candidates for president in 2016 (though not Trump) took campaign funding from the Koch brothers, who have been at the forefront of the fight against the scientific consensus on climate change.

The currency in which these campaigns trade is doubt. Their goal is to sow uncertainty in the public mind about what the science shows. In the words of an American Petroleum Institute action plan from 1998: Victory will be achieved when average citizens understand uncertainties in climate science. To that end, money has been funnelled towards scientific researchers who dissent from mainstream opinion, even if those researchers are in a very small minority. Sowing doubt turns out to be relatively cost-efficient, because dissent only needs a few exceptions to the orthodoxy, whereas consensus requires everyone else to hold fast to it.

However, it is no coincidence that this is how the oil industry chooses to see the struggle. Framing it as a contest between heterodoxy and orthodoxy fits the language of scepticism. In that way, it can be made to appear consistent with both science and democracy. Democracy needs dissent in order to function. Scientific progress depends on people being willing to challenge the conventional wisdom. Many climate sceptics argue that they are the ones on the side of science, because the currency of science is doubt. But when heterodox opinion gets purchased with hard cash, it cements the triumph of cynicism. Money ensures that motives are what matter.

The ultimate goal of the merchants of doubt has been to politicise the orthodoxy, not simply to dispute it. What has given climate scepticism political teeth over the past two decades is the drive to associate the scientific consensus with the political establishment. Mainstream scientists and mainstream politicians are both viewed as belonging to a club that is comfortable spending other peoples money but deeply uncomfortable with anyone elses point of view. In an age when all kinds of elites are viewed with suspicion, portraying scientists as a well-connected interest group leaves them vulnerable to political attack. Scientists take public funding. Scientists pass judgment on each others work. The scientific establishment is just another a closed shop.

Political cynicism has weaponised climate scepticism. But it might also prove to be its achilles heel. Just as pure science struggles with the fact that it cant avoid politics, so pure politics struggles with the fact that it cant avoid science. Even the most cynical political operators need to know whats really likely to happen. As reporting in the Los Angeles Times has shown, at the same time that it has been funding a PR campaign to question the scientific consensus, ExxonMobil has also been funding some of the research that underpins that consensus, including studies of rapidly shrinking ice levels in the Arctic. In the words of David Kaiser and Lee Wasserman, writing in the New York Review of Books, a company as sophisticated and successful as Exxon would have needed to know the difference between its own propaganda and scientific reality. Kaiser and Wasserman argue that, as a result, the company has committed fraud: it failed to disclose to its shareholders the basis on which it was making its investment decisions. Its business plans take it for granted that climate change is a real and imminent threat.

This behaviour has clear echoes of an earlier attempt to challenge the scientific consensus: the campaign by the big tobacco companies to dispute the link between smoking and cancer. Although many of these businesses recognised as far back as the 1950s that the science was sound, they funded a body of widely disseminated research designed to throw doubt on that view. Their goal was to keep the public open-minded about the dangers of cigarettes, and therefore to keep as many of them puffing away for as long as possible. It was a purely cynical business strategy, and in some cases it was criminal as well. It worked to the extent that it bought the tobacco industry time to reorient its investment and marketing to take account of the new reality. But in the long run it failed. No reasonable person and certainly no serious politician now doubts the link between smoking and cancer. The fate of tobacco can give hope to people who worry that the truth is always outgunned: the science won out over the cynics in the end.

Are there grounds for thinking that the same will be true for climate science? The tactics of the industries in question may be similar, but the cases are different in crucial respects. Tobacco impacts on its victims directly smokers do eventually die and it was when personal experience caught up with industry denial that the argument was lost. It is possible that climate change could kill even more people than smoking. But any damage on that scale is still a long way off. It is also far less direct. The victims will not necessarily be the people who are currently engaged in the most harmful behaviour.

Once it had been established that smoking causes cancer, it was clear what had to be done to prevent it: individuals would have to stop smoking and tobacco companies would have to stop encouraging them. There is no equivalent certainty around climate change, even once we accept the scientific consensus that it is real. Those responsible for causing it are not those who will suffer most from it. The current migration crisis is partly being driven by changes in the climate affecting food and water supplies in Africa and the Middle East. But the politics of migration will never find answers in the science of climate change, for the simple reason that the science does not tell us what to do about it.

Climate change has distinctive features as a political issue that make it much more intractable than other controversies in which the science was once in cynical dispute. The hyper-politicisation of climate science has coincided more or less directly with the rise of social media; the fight over tobacco took place before the age of the internet, which at least gave scientists some measure of protection from personal exposure. Meanwhile, the consequences of climate change are long-term, global and uncertain. That means any solution places a huge premium on trust. We have to trust that it really will cause harm. We have to trust that we are responsible for any harm it causes. We have to trust that any action we take wont be undone by the inaction of others. In an age of enormous mistrust in politicians, this poses a huge challenge.

We need far more trust in politics than we have at present in order to take concerted action on climate change: apart from anything, we would need to believe that politicians would be willing to share in the sacrifices they ask of us. In the meantime, those who are determined to sow suspicion about the merits of concerted action are fuelling our mistrust in politics. There is no equivalent of watching a relative die of lung cancer to split the difference.


The people who made the case that smoking causes cancer were not generally thought of as hypocrites. Its true that some of them still smoked, even after they knew the dangers. But there were far more smokers inside the tobacco industry, where being seen with a cigarette in hand was positively encouraged as a signal that there was nothing to worry about.

Climate science is different. Ever since it became a political issue, it has been bedevilled by accusations of hypocrisy. The internet is awash with tales of Al Gore and his monstrous double standards: he racks up enormous air-conditioning bills in his multiple homes; he leaves his private jet idling on the runway as he spreads the message that flying is wrong; he sells his television network for megabucks to al-Jazeera, where the money to buy it comes from Qatari oil. In the words of the National Review in 2016: The [climate] hysterics are hypocrites. Its austerity for thee but not for me as they jet around the world to speak to adoring audiences about the need for sacrifice. Until wealthy liberal New Yorkers start selling up their Manhattan real estate and moving to higher ground, the cynics say, theres really nothing to worry about.

Recent research by a group of psychologists shows why this is such a problem: we dislike hypocrites because we hate they way they seem to be signalling their superior virtue. Take two kinds of claims about environmental activism. Under one set of conditions, a speaker claims to recycle his rubbish, after which it is revealed that he does no such thing. Under the other, a speaker tell his listeners they should recycle their rubbish, after which it is revealed that he does not do it himself. The first is a liar. The second is a hypocrite, but not a liar, since what he says is still true (people should recycle their rubbish). Most people respond with relative equanimity to the lie. But they loathe the hypocrisy, because the hypocrite seems to be patronising them.

Environmentalist
Environmentalist and former US vice president Al Gore at Trump Tower in New York in December last year. Photograph: Kevin Hagen/Getty Images

This is terrible news for environmentalism. Doctors who smoke are not really patronising their patients: if anything, they are revealing sympathetic human weakness. But environmental activists who leave the engine running are easily portrayed as dreadful elitists: they think the rules dont apply to them. The populist rabble-rousers of the right have exploited this fact mercilessly. Hypocrisy is hard to avoid when it comes to the politics of climate change, since it is a collective-action problem. Its far from clear what difference any individual action will make. What matters is what we do together. This makes it practically impossible for any one individual to match words to deeds. Yet the failure to do so provides the perfect stick for the climate cynics to beat their opponents with.

If we dislike hypocrisy more than we dislike lying, then it is not just a problem for climate politics. It is a problem for democracy. It gives the liars their chance. During the presidential campaign, it was widely hoped that Trumps relentless record of untruths would be his undoing. In the New York Times, David Leonhardt painstakingly listed the 26 lies Trump told in the first presidential debate, which ought to have been enough for anyone. But Trump has always been careful not to come across as the wrong sort of hypocrite: the kind who seems to be talking down to people. Hillary Clinton was not so careful. And when the voters get to choose between the two, the hypocrite loses to the liar.

In the febrile, divisive state of our politics, its not what you say, its what you say about yourself by saying it that really counts. The social media revolution amplifies and exaggerates these kinds of accusations. It has become easier than ever to find evidence of how individuals public attitudes are given the lie by their private actions. There are now so many public attitudes to choose from, and private actions are now so much harder to hide. Twitter is a vast hypocrisy-generating machine that is corroding democratic politics. Scepticism, which is a democratic virtue, is giving way to cynicism, which is a democratic vice, across the board.


Since his arrival in the White House, Donald Trump has been in the middle of a tug of war between the liars and the hypocrites inside the West Wing. On one side stands Steve Bannon, representative of the alt-right, still looking to flush out the hypocrisy of the globalists and ready to peddle any old conspiracy theory to achieve his goals. On the other stand the younger members of Trumps family, including his daughter Ivanka and her husband Jared Kushner, who are more concerned with keeping up appearances.

Climate change quickly emerged as one of the fault lines in this showdown. In the end it was Bannon who persuaded Trump to make good on his promise to withdraw the US from the Paris climate accord. Kushner argued that this would send the wrong signal and that much more could be achieved by sticking with the agreement but reorienting it to suit the interests of the big American fossil fuel producers. Trumps secretary of state, Rex Tillerson, who was previously the CEO of ExxonMobil, sided with Kushner. They lost.

In this case, both approaches are equally cynical. For Bannon, everything, including climate science, is just an extension of politics: all that matters is which side you are on. For his opponents inside the administration, climate change can be sidelined as an issue by paying lip service to the consensus while acting in ways that make it irrelevant. The liar denies that climate change is really happening. The hypocrite accepts that it is real but behaves as if the words dont mean anything.

Trumps administration is dragging climate science further into the swamp of partisan politics. Populist attacks on the scientific consensus co-opt reasonable doubt and turn it into unreasonable suspicion of another self-interested elite. The natural tendency of any elite under this sort of pressure it to build the castle walls higher in order to keep the interlopers out.

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Donald Trump with his advisers Jared Kushner (centre) and Steve Bannon. Photograph: Carlos Barria/Reuters

Faced with a concerted assault on their integrity, what should climate scientists do? They face a choice. One option is to try to reclaim climate scepticism from the people who have corrupted it. The other is to insist more strongly than ever on the consensus. When the space for doubt has been taken away, you can respond by becoming more certain of your own position. Or you can try to take doubt back.

There are lessons for the politics of climate change from economics. The economics profession, like any other, is full of people who will express their doubts and uncertainties among friends. But when confronted with a hostile or bemused public, they will close ranks. Economists do not want to appear to be unsure of themselves, given how little the public understands of what they do anyway. So rather than admit that there are many different ways of thinking about, for example, free trade, they insist that all economists agree it is a good thing. As the economist Dani Rodrik puts it, when faced with hostile fire, the natural tendency is to start circling the wagons. For the many voters who do not see the benefits of free trade, this looks like a stitch-up.

Economists have found themselves vulnerable to the same dilemma as climate scientists. If they express doubt, the cynics rip them to shreds. But if they conceal doubt, the cynics rip them to shreds anyway. Political pressure often tempts experts into making predictions about the immediate future to prove their point, even though this is a hostage to fortune. Economics is not really meant to be a predictive science. But making predictions is a good way to get attention in a very noisy news environment. The temptation always exists to reduce long-term forecasts to short-term predictions in order to get a hearing. Some economists fell into this trap before Brexit. By talking up the immediate downside, they made it easy to dismiss their warnings when the worst failed to happen straight away. The costs of a failed prediction far outweigh the benefits of an accurate one, especially when that prediction has made in the service of politics.

Political journalism is now suffering its own version of this failure. Reasonable doubts about Trump and Jeremy Corbyn were too often accompanied by journalistic predictions that they couldnt possibly win. These predictions were made to show that scepticism about their politics was something more than just one commentators opinion: it was based on a testable hypothesis that would be borne out by events. When the predictions turned out to be wrong, the reasonable doubts got discredited, too.

Climate scientists have not faced an embarrassment on an equivalent scale to the financial crash of 2008 or the elections of 2016-17: the big shock they didnt see coming. Were global warming to turn back into global cooling, climate science might find itself in the same boat as the economics profession: derided for its failure to provide any kind of warning mechanism for the real dangers we run. For now, the main accusations it faces are of crying wolf. In their eagerness to push the idea that climate change is real, environmentalists have too often been drawn into making premature claims about when we will feel its effects. Gore did it in An Inconvenient Truth, released in 2006, when he talked about a 10-year tipping point after which disaster would be at hand. He also overstated the threat of larger and more frequent hurricanes, in the recent aftermath of Hurricane Katrina. Until the wolf is at the door, shouting louder and louder about how close he is does no good. It plays into the cynics hands.

Science often makes for bad politics, because it pretends that it is not politics. The most effective political arguments for taking climate change seriously cannot therefore be ones that simply rest on the science. We need to stop thinking that one side has possession of the truth and the other is just running on money and prejudice. Both sides get tempted into being economical with the truth in the cause of politics. The cynics know what they are doing, which is what makes them cynics. The other side often doesnt, which is what leads them into the cynics trap.

We live in an age when mistrust of politics has spilled over into mistrust of expertise, and vice versa. To respond with ever-greater certainty in the name of science is a big mistake. Expertise doesnt just need humility. It also needs to reclaim the idea of scepticism from the people who have abused it. Experts need to find a way of expressing uncertainty without feeling it undermines their expertise. Voicing doubt has been allowed to become a synonym for admitting you were wrong. The way out is to stop insisting that you were right in the first place.

The scientific consensus on climate change is real. But by insisting on its merits for the purposes of politics, its champions have exposed it to ridicule. Political arguments for climate science indeed, for any science in the age of Trump should not keep saying that the populists are lying about the consensus. They should say that they are hypocrites about the doubt: they do not practise what they preach because they think they know the answers already. Climate change deniers argue they are only trying to discover the truth. We should all be sceptical about that.

Main illustration by Jasper Rietman

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Read more: https://www.theguardian.com/environment/2017/jul/07/climate-change-denial-scepticism-cynicism-politics

China passes law to ensure films ‘serve the people and socialism’

First law governing the countrys film industry targets box-office fraud and says film-makers must have excellent moral integrity

China has passed a law that bans film content deemed harmful to the dignity, honour and interests of the country. It also encourages the promotion of socialist core values.

Booming box-office receipts have drawn Hollywood studios and a growing Chinese film-making industry into fierce competition for the Asian giants movie market, which some analysts predict will soon eclipse that of the US.

The new laws govern the promotion of the film industry and were approved by the National Peoples Congress standing committee at a meeting in Beijing.

The law states that its aim is to spread core socialist values, enrich the masses spiritual and cultural life, and set ground rules for the industry.

It forbids content that stirs up opposition to the law or constitution, harms national unity, sovereignty or territorial integrity, exposes national secrets, harms Chinese security, dignity, honour or interests, or spreads terrorism or extremism.

Also banned are subjects that defame the peoples excellent cultural traditions, incite ethnic hatred or discrimination, or destroy ethnic unity.

The law says films should serve the people and socialism, state news agency Xinhua reported. Foreign film-makers damaging Chinas national dignity, honour and interests, or harming social stability or hurting national feelings were not welcome, it added.

The Communist party fiercely criticises governments and public figures who have expressed sympathy for the Dalai Lama. Brad Pitt angered authorities when he appeared in the film Seven Years in Tibet.

Companies that work on such content now face fines of up to five times their illegal earnings over 500,000 yuan (60,000).

Fines will also be imposed for providing false box-office data, a widespread problem as firms have been caught pumping up ticket sales to generate marketing buzz.

The new laws also lay out stricter rules for actors and film-makers, saying people employed in the industry should have excellent moral integrity and self-discipline, Xinhua said. This follows recent instances of celebrities being caught taking drugs.

The law has been in development since 2011, and will come into effect on 1 March 2017.

Only 34 foreign films are given cinema releases each year under a quota set by Beijing, and all are subject to official censorship of content deemed politically sensitive or obscene.

To get around restrictions, Hollywood studios looking to capitalise on Chinas burgeoning market have sought partnerships with local companies. Co-produced movies can bypass the quota as long as they contain significant Chinese elements, such as characters, plot devices or locations.

This may no longer be as important, as already this year the quota has been relaxed possibly to prop up box-office figures after an unexpected downturn and a renegotiation of the deal with the US in February is expected to increase the number of foreign films allowed in.

Read more: https://www.theguardian.com/film/2016/nov/08/china-passes-film-industry-law-box-office-fraud

‘This is just the start’: China’s passion for foreign property

A huge new wave of Chinese investment in overseas housing may be about to flow into the global market. In Hong Kong, Tom Phillips meets the salesmen who market British property to mainland China

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China is so big, marvels Victor Li, using his fingers to count all the cities he has flown to over the last 12 months to meet with cash-rich Chinese buyers interested in buying into a real-life game of London Monopoly.

Li, a director of international project marketing for the US real estate giant CBRE, is predicting a surge of eastern investment in British homes over the next decade, as increasingly affluent Chinese investors acquire a taste for international property.

I think it is just beginning, says Li, of the amount of money pouring into property around the world from mainland China. You do the figures: China has a population of 1.4 billion. If you target only 1% of Chinas population, thats 14 million people so its already almost two Londons.

Sitting in his office overlooking Hong Kongs skyscraper-dotted Victoria Harbour, Li estimates that just 3% of potential Chinese investors in overseas property have so far been found meaning a virtually untapped goldmine lies over the border in mainland China. China is a big market, you know? he says. They are getting wealthier and wealthier.

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Victor Li in his Hong Kong office

Rich Hong Kong investors have been ploughing money into British bricks and mortar for decades, snapping up off-plan apartments at weekly property fairs that can then be rented, flipped, held as investments or used as second homes.

I have one [London property] in Canary Wharf, one in City Island, one in Wembley Park, one in Elephant and Castle, said one investor matter-of-factly at a recent expo in Hong Kongs chic Mandarin Oriental Hotel, as he eyed a new development near the Thames Barrier in E16.

But many real-estate agents and property experts in east Asia believe a new wave of investment is just getting under way, as mainland investors develop a taste for international real estate, including postcodes up and down the UK.

Our thesis and this is supported by quite a lot of evidence is that in many ways the international Chinese investment journey is probably just starting, says Charles Pittar, chief executive of Juwai.com, a website that aims to pair mainland buyers with property developers in places such as Australia, the US and the UK.

Pittars company, which lists 2.5 million properties and calls itself Chinas largest international real-estate website, estimates that in 2014, Chinese outbound investment into residential and commercial property was more than $50bn (38bn).

I guess the key is: what is it going to become? Pittar says. Our view is that it could be growing to somewhere around $200bn [annually] over the next 10 years.

And Britain, despite its decision to leave the EU, is expected to be one of the key focuses, he adds. The UK market, particularly post-Brexit, is really picking up.

Pittar traces mainland Chinas hunger for overseas property back to the turn of the century, just before Chinas entry into the World Trade Organisation signalled the latest phase of its integration into the global economy. But the outflow of money has gathered pace over the past decade, and is set to grow further as middle-class investors from second- and third-tier cities get in on the game.

Its a big market now, but it is likely to be anywhere from two to four times the size in 10 years time, Pittar says. The exciting thing about China is that there are 168 cities with more than a million people. So this is just such a huge market.

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A poster for the new Royal Wharf development in London from a recent property show in Hong Kong. Photograph: Tom Phillips for the Guardian

Li, who specialises in London properties worth up to 4m, concurs with the notion that Brexit is helping to accelerate the boom in interest in the UK: Some of my clients at the beginning of the year, they said: OK Victor, lets wait, wait, wait. And then, after they found out about Brexit and [the] sterling came down more than 10%, I got more calls they want to go back into the market. Its lots of saving, he says with a grin.

According to Pittar, Chinese who buy property overseas have four main motivations: investment, lifestyle, emigration and education. Many are looking for a foothold in the UK, where they hope their children will go on to study.
Some people are buying for their family to use it, says Li, some are buying to diversify, some are buying because they want to own a property for investment and some people are buying for prestige, to say: I own a piece of property in London.

Crucially, he says, London is also seen as a secure place to store money that investors want to move out of China, to guard against the devaluation of the Chinese currency, the yuan. People in mainland China, they want to get their money out … They believe that money out of China is safe money. And London is a safe-haven to park that money.

The 50-year-old property salesman made his first foray into mainland China in 2001, pitching a slice of Lambeths St George Wharf to would-be investors at a five-star hotel on Shanghais answer to Oxford Street.

Over the past year alone, Li has made almost 20 such trips, jetting out from his base in Hong Kong to cities including Guangzhou, Chongqing and Chengdu to meet with cash-flush Chinese buyers.

This one is Macau This one is Shanghai, he says, flicking through photographs on his smartphone of recent seminars where he advertised luxury London developments such as Clipper Wharf in E1 and Carrara Tower on City Road.

Li says some mainland investors agree to buy apartments on the spot. If they are interested, they reserve the unit they just use a credit card. They have Union Pay, Mastercard or Visa: 5,000.

Many of his mainland investors are real-estate tycoons who have made a fortune from their countrys economic boom, and now just want to take the profits, cash out and move some of their wealth overseas.

But Pittar believes the story of ordinary, middle-class investors is more significant than that of Chinas globe-trotting, Ferrari-driving elite. What we read in the newspapers is always about the very wealthy Chinese who come and buy a 5m, 10m, 15m property. But the middle class is key. How big is the middle class? It could be 120 million. We tend to think its probably closer to 150 million.

Once theyve got somewhere to live in China, the reality is that the domestic market is quite expensive, so thats why they are looking more for international opportunities. Like anyone who wants to preserve their wealth, diversification is important.

Londons
Londons Nine Elms redevelopment: property in the UK capital is seen as both prestigious and secure in China. Photograph: Frantzesco Kangaris for the Guardian

Predictions that a new wave of investment from mainland China is on the horizon will stir further debate over the measures British politicians might use to protect local home buyers.

The anticipated influx of money from mainland China into the UK is set to affect not only London historically the focus for much east Asian investment but cities such as Manchester, Liverpool and Birmingham, to which more of the investment is now heading.

Those seem to be the hotspots, says Neil Jensen, the Hong Kong-based regional director for London estate agent Fraser & Co, who promotes developments in the capital to Asian investors.

A particular spotlight has been shining on Manchester since last October, when Chinese president Xi Jinping toured the city to lend his support to George Osbornes northern powerhouse project during his first state visit to Britain.

Jensen says Fraser & Co, founded in 1995, has traditionally specialised in London properties which it markets internationally through offices in Dubai and Hong Kong. Now, however, he is preparing to offer his clients their first major investment opportunity outside the capital, in a project specifically designed to attract Chinese money.

Called New Chinatown or Xinhua Bu (New China Wharf) in Mandarin the 200m venture in Liverpool describes itself as one of the most important and exciting developments in the UK today and promises to be one of the UKs most luxurious and desirable residential destinations.

The developments website boasts: It is the burgeoning energy and dynamism of modern China transplanted into the heart of an historic World Heritage City. Adding: This is an historic moment This is a unique investment opportunity.

Underpinning the whole masterplan is the idea and motif of the awakening dragon a powerful symbol of Chinas resurgence and status as a new global power.

Jensen says improving transport infrastructure in the northwest and relatively low prices meant New Chinatown where two-bedroom duplex penthouses are on offer for up to 546,427 and ordinary one-bedroom flats from 119,211 would be a hit with Chinese investors.

You cant just put up a block of flats in Liverpool and expect people to buy it If you want foreign buyers there has to be a story, he says, adding: Theyll probably go quite quickly.

The fringes of London have also come onto the radar of Chinese investors, thanks to Crossrail, a 14.8bn, 73-mile metrolink cutting west to east across the capital, which is set to open in 2018.

Most of your investors 20 or 30 years ago would have been going more towards the bullseye in dartboard terms, Jensen says, referring to the centre of London. But improved transport links are now drawing foreign investors to places such as Slough, Ilford and Canning Town.

The commuter area anything within a 20-30 minute travel time [of central London] is hot, says Jonathan Gordon, a director at IP Global, a Hong Kong property investment firm that is promoting projects in Ilford and Croydon and has previously invested in Slough.

Mercury
Mercury House, a new development in Slough being marketed in Hong Kong. Illustration: Fraser & Co

Slough has got Crossrail going through it so you can get to Bond Street in no time, he says. It is those sorts of stories we are interested in as opposed to buying in Bond Street itself.

Crossrail is not the only reason foreign investors are now looking to the outskirts of the capital, though. Investors and industry insiders say stamp duty increases targeting wealthy foreign investors have pushed up the cost of buying more expensive properties in prime locations.

That has led many foreign investors to buy a larger number of cheaper properties in more peripheral, suburban areas, says Gordon, where transaction costs are lower.

One veteran Hong Kong investor, with a portfolio that includes properties in London, Manchester and Liverpool, explains: You buy a large number of properties, but lower-priced ones You pay something like 200,000 or 250,000, rather than 1m for zone one in Mayfair, places like that.

This new wave of Chinese investors includes people such as Jody Ye, a 30-year-old from Chongqing, a metropolis in south-west China. In July, Ye paid 200,000 for a flat in Bristol, where she went to university and now lives. She is planning to buy her second UK property.

Buying property back home is too expensive, she says. Investing in the UK is much more cost-efficient. Bristol is not only a great place, but, she adds: British people think Bristol is posh.

The
The Hong Kong headquarters of Juwai.com

Fan Feifei, 34, from Xian, is another Chinese buy-to-let investor. She is preparing to purchase her third property in Birmingham. I bought it purely for investment, she says of her second purchase, a 135,000 home in B29, which she rents to overseas students.

Since 2014, Chinese people have been rushing to buy houses in the UK, adds Fan, pointing to high rental yields and stable property prices as key driving factors. All of the Chinese people around me are buying houses or have already bought several houses in the UK. Im the one who has bought the least, with only two.

Song Dongzhe, a third mainland investor, from the north-eastern city of Dalian, bought his first British property a three-bedroomed house in Selly Oak, south-west Birmingham in 2012 for 125,000. Earlier this year he bought two more.

Song says the UK is very attractive to Chinese property investors, largely because it does not have the high duties that have been introduced in Canada and Australia targeting foreign buyers.

High prices in London make it too risky to buy there, he adds. But as the UKs second biggest city, I thought Birmingham was a choice that made sense.

A fourth mainland investor, who declines to be named, says President Xis tour of the UK convinced him Britain was the right place to invest his familys fortune. Property in major Chinese cities such as Beijing, Shanghai and Shenzhen is now too expensive, the Shanghai investor says, and Chinas stock market is extremely unstable so I think its a good time to invest in [the] UK.

As well as London, he says he is now looking at opportunities in cities such as Birmingham, Manchester and Edinburgh.

Underlying discontent

Speaking in his Hong Kong office, property promoter Gordon predicts that, as has happened elsewhere in the world, concern over foreign investment in British property will eventually lead to the introduction of measures to protect local buyers. There is that underlying discontent in some camps to say: Well, its not on, its not fair releasing and selling all this property overseas.

I wouldnt be surprised if, going forward, there is some legislation that says a certain percentage of properties have to be sold or marketed locally for a period of time, and then it is fair game overseas [after that].

Australia, currently the second biggest destination for Chinese property investment after the United States, has been cracking down on foreign buyers since last year, after complaints that Chinas voracious appetite for property in cities such as Sydney and Melbourne was pricing local buyers out of the market.

Hong Kong, a semi-autonomous city that returned to Chinese control in 1997, has also been fighting to quell a huge wave of often speculative mainland investment in residential property. In a bid to rein in sky-high prices, authorities in the former colony have rolled out a series of cooling measures in recent years, including tighter lending rules and higher stamp duties.

Hong
Hong Kong has been battling a huge wave of investment from mainland China in its residential property. Photograph: Marco Wong/Getty Images

Victoria Allan, an Australian real estate entrepreneur who specialises in leasing and selling property on Hong Kong island, says: The price point has moved so high in Hong Kong that its hard to buy a house any more for under US$10m that, five or six years ago, you could buy for $5m.

Allan, founder of Habitat Property, says efforts to stem the flow of mainland money into Hong Kong have diverted a significant amount of Chinese investment elsewhere. Its moved into Australia and the UK; its moved into the US. And it has really pushed those markets up as well.

Allan believes that the Hong Kong government pushed back too hard against the influx of mainland money, and advises British policymakers to avoid taking too drastic steps.

I would definitely say: dont shut it out totally. That was our mistake. I think Hong Kong has approached it too harshly. Why shut the door totally?

By locking mainland Chinese real estate investors out, Allan argues, the whole economy suffers, not just the property market. There has to be some kind of balance. We are supposed to be an international city.

Maybe some tax is applicable, she says, but I think there is a way to manage it in a really positive way for everyone. Particularly if that is done in conjunction with town planning and helping direct the investment into towns and city centres that need assistance with good housing. There are great ways to take the investment.

Jensen also warns against demonising foreign investors, who he says play an essential role in helping developers build new homes. You cant be a world city and not have foreign investment.

Theres a lot of schemes going up, but how on earth are they going to fund them? he asks. The banks dont have the money So youve got to rely on overseas investment, be it funding by way of people buying them, or by someone saying, OK, well buy the site and the development and well sell it back to the Brits.

Li says he recognises the controversy surrounding foreign investment, but shrugs it off as a natural phenomenon: I think even in Hong Kong we face the same problem. You just cant avoid it; its supply and demand. Everybody wants to live in the best location, right?

But not everyone is convinced Chinese investment in overseas property will continue to soar. Gordon says the scale of future investment will depend on the health of the Chinese economy, and the enthusiasm with which Beijing enforces capital controls limiting how much money individuals can remove from the country. Others believe the uncertainty caused by Brexit will put the breaks on further moves into the UK.

Concerns over the risk involved in some UK developments may also curb enthusiasm for off-plan investment. For months, rumours have been swirling in Hong Kong about major developments that appear to have collapsed after the developer went bust, leaving investors struggling to recoup their money.

During a demonstration outside the British consulate in July, protesters held up placards reading: Home is where the fraud is and A scam of two cities.

Property industry insiders argue foreign investment from places such as China is helping to transform urban centres around the globe, and is the only way to finance affordable new homes in cities such as London.

I think a lot of it will be positive on the basis that this is fuelling regeneration, Gordon says of the coming wave of Chinese investment in UK property. Its creating jobs, its improving infrastructure, and it is making, generally speaking, the quality of life better.

But London mayor Sadiq Khan has warned against the capitals homes being used as gold bricks for investment, and has spoken out over how some new developments are touted to foreign investors before local buyers.

There is no point in building homes if they are bought by investors in the Middle East and Asia, the mayor said in May. I dont want homes being left empty. I dont want us to be the worlds capital for money laundering. I want to give first dibs to Londoners.

Additional reporting by Christy Yao in Beijing

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Read more: https://www.theguardian.com/cities/2016/sep/29/inside-china-passion-foreign-property-investment-uk