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Chinese Real Estate Shenanigans – Bizarre Divorce & Remarry Scheme to Avoid Taxes Goes Trending

They divorced, wife-swapped, divorced, and remarried – all for tax evasion. Although Chinese media condemn the story, netizens applaud it.

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A bizarre report about two couples divorcing and ‘wife swapping’ in order to avoid paying taxes on their property transfer has become a popular news story of the day in China. While Chinese media denounce the tax-evasive real estate “shenanigans”, netizens have unexpectedly sided with the couples.

A story about two couples in Jinan, Shandong, who faked their divorce and did a wife-swap in order to evade taxes during a property transfer has become a top story on Netease, one of China’s leading online (mobile) news platforms.

The story started when couple A wanted to buy a property from couple B. They each ‘divorced’, after which the wife of couple A remarried with the husband of couple B. When ownership of their property was transferred, they divorced again, and couple A and couple B both remarried their original wives.

The comical divorce shenanigans were exposed when the case recently ended up in court. The Netease story about the couples was read 55,500 times within hours after its publication.

People in China have been divorcing to skip property taxes for years. In 2013, Chinese authorities implemented tougher taxes on home sales, as much as 20%. At the time, (international) media already reported about the following surge in divorces in cities such as Shanghai (Sweeney 2013).

Many Chinese invest their wealth in real estate – especially because property prices have been skyrocketing for years. Since divorce allows couples to split ownership of their property and then sell without having to pay those high taxes, there are those who opt for a ‘quickie’ – a no-fault, uncontested divorce. Once divorce and the division of real estate is complete, and the property has been sold, they can remarry.

In the Jinan case, the property was over 400 square meters big and worth 12 million RMB (US$ 1.9 million) when couple A wanted to buy it from couple B in the summer of 2015. Due to the size and prize, the Sina News reports, high taxes need to be paid to apply for the property’s transfer procedures.

In order to obtain the property rights in the smoothest and cheapest way possible, couple A came up with the idea to ‘swap wifes’ for the time being. Couple B divorced, attributing the property to the husband – who then married the wife of couple A. After that, husband B transferred the property to the name of his new bride, wife A, and then divorced her again only to let the two remarry their original spouses again.

The ‘divorce scheme’ to evade taxes, image published by Netease.

The deal was to transfer the first half of the money before the fake marriage, and then the other half when the ordeal was over. Eventually, however, their plan failed when husband B made a mistake in finalizing the paperwork before receiving the final 6 million. When wife A could not come up with the 6 million RMB, husband B took the case to court.

The court, however, was not sympathetic to the couples’ ingenious plans and revoked the transfer, and fined the couple 50,000 rmb (±$8000) each for their tax evasive ‘divorce and remarry’ construction.

Although the Netease news report, that was also (originally) published on Qilu Evening News (齐鲁晚报) and on Sina News, condemned the couples, saying that “marriage registration is no child’s play” and that “legal boundaries should not be crossed for one own’s immediate benefit”, commenting netizens unexpectedly applauded the story and sided with the creative couples.

“Is this illegal?”, a top commenter (8500+ likes) responded to the story: “This should not be called tax evasion, it should be called reasonable tax avoidance!”

Many commenters point out that since neither divorce nor remarrying is illegal, it is not the couples’ fault for making use of their legal rights – and that it is the Chinese property tax laws that are to blame.

Chinese authorities do not impose regular levies on homeowners just yet; individuals are only taxed when buying or selling property. Although China’s house property taxes, which are believed to tame the housing prices, will be pushed forward, it might take another three years before their implementation (Gopalan 2018).

“These couples are just as birds in the forest,” one Netease commenter writes: “They fly when the big tax comes.”

“What did they do wrong?”, many wonder.

By Manya Koetse and Miranda Barnes

References

Gopalan, Nisha. 2018. “Don’t Bet Your House on China’s Property Tax.” Bloomberg, March 8. https://www.bloomberg.com/gadfly/articles/2018-03-08/don-t-bet-your-house-on-china-s-property-tax-just-yet [11.4.18].

Sweeney, Pete. 2013. “Till taxes do us part: Chinese divorce to skip property tax.” Reuters, March 6. https://www.reuters.com/article/us-china-property-divorce/till-taxes-do-us-part-chinese-divorce-to-skip-property-tax-idUSBRE9250CY20130306 [11.4.18].

Spotted a mistake or want to add something? Please let us know in comments below or email us.

©2018 Whatsonweibo. All rights reserved. Do not reproduce our content without permission – you can contact us at info@whatsonweibo.com.

Miranda Barnes is a Chinese blogger and part-time translator with a strong interest in Chinese media and culture. Born in Shenyang, she used to work and live in Beijing and is now based in London. On www.abearandapig.com she shares news of her travels around Europe and Asia with her husband.

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    Saedul JS

    November 18, 2019 at 10:26 am

    Nice post! This is very informative! Great job! Keep on posting!

    Family Lawyer Of Saskatoon

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China Insight

Less Education, More Babies? Discussions Surrounding China’s Falling Birth Rate

Another year, another drop in birth rates: according to the latest statistics, China’s 2022 saw more deaths than births.

Manya Koetse

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China’s falling birth rates have been a topic of discussion for years. With the latest statistics marking another record low in birth rates, Chinese experts look for ways to motivate couples to have (more) children at an earlier age.

Official yearbook data, released by China’s National Bureau of Statistics (国家统计局) on Jan. 17, 2023, shows that the total Chinese mainland population was 1.4118 billion by late 2022. Last year, 9.56 million people were born, while 10.41 million people died. The population in 2022 fell by 850,000 from 2021.

As reported by The New York Times, according to the latest data, 2022 was not just the first time deaths outnumbered births in China since the Great Leap Forward in 1960s, it was also one of the worst performance years for the Chinese economy since 1976.

China’s dropping birth rates have been a topic of discussion for years. The annual statistics that were published three years ago, in January 2020, showed that China’s birth rate in 2019 had fallen to its lowest since the founding of the People’s Republic of China. In that year, the birth rate was 10.48 per thousand, and 14.65 million babies were born in mainland China.

The data from later years showed that just 12 million babies were born in 2020 (8.5 births per thousand) and that only 10.6 million babies were born in 2021 – a rate of 7.52 births per thousand. The latest number is another record low.

Over recent years, various trends in Chinese (online) media have highlighted the social issues behind China’s dropping marriage and birth rates. The rising costs of living and the fact that Chinese younger generations “prefer to marry late,” are often mentioned as an explanation for China’s decline in marriage rates and the interrelated lowering birth rates.

But China’s so-called ‘leftover’ single men have also been pointed out as a “crisis,” with China having millions of more men than women of marriageable age – partly a consequence of the one-child policy combined with a traditional preference for baby boys.

For years, China’s ‘leftover women’ were also mentioned as a reason for the country’s declining marriage rates; China’s well-educated, career-oriented, urban single women were singled out for making it harder for China’s unmarried men to find a wife because of their ‘choice’ to postpone marriage and family life. This increased the pressure on China’s single women to get married, including facing an associated social stigma, which has become a recurring topic of debate on Chinese social media.

Chinese couples are allowed to have two children since 2015, three children since 2021, and it was later widely reported that parents with more than three children would also no longer receive fines according to a draft law amendment.

Celebrating the ‘three child policy’ (image via Weibo.com).

But the new regulations have not had the desired effect, with many couples simply not wanting a second child or being unable to afford it. The pandemic and zero Covid policy also haven’t exactly helped to boost China’s birth rates.

On social media, official media put out the two hashtags “9.56 Million People born in China in 2022” and “In 2022, China’s Population Decreased by 850,000 people” (#2022中国全年出生人口956万人#, #2022年中国人口减少85万人#). Among commenters, the latest data have led to various discussions.

Some are about the costs of living:

  • There’s so much to consider if you want to have a child, the costs are just too high, and I wouldn’t be able to support it.”

Others are about increasing social pressure:

  • These days there’s too much pressure on men to get married, they’re not confident and at ease anymore.”

And then there are those who see no problem in a population drop:

  • It’s only natural for the population to decline, how can you expect it to be like the old days when people would have five or six kids; the people like my grandma in my hometown all come from families with at least four kids.”
  • This country of 1,5 billion people is constantly worried about going extinct, people are crazy!
  • The Information Age doesn’t need so many people anyway.”

 

HOW TO BOOST BIRTH RATES?

 

But while netizens’ opinions on the matter vary, experts, politicians, and media outlets focus on the topic of how China’s birth rates can be boosted.

Various places across China have already announced policies to encourage families to raise more than one child, including prolonged maternity leave, increased maternity allowances, and support for home purchases.

One hashtag that was popular on Weibo this week was about a statement made by the billionaire businessman Zong Qinghou (宗庆后), CEO of leading beverage company Wahaha Group (哇哈哈).

Zong is a proponent of offering affordable housing to young people. In a video that has since gone viral – and which was a segment from a CCTV interview, – Zong talks about his low-cost housing project and also called on China’s young people to find a partner, get married earlier and have children sooner to “contribute” to the country’s birth rates (#宗庆后希望年轻人早点结婚生娃#).

The hashtag triggered many replies. Most of them criticized Zong’s remarks, and many commenters expressed that they did not like being told to marry and have kids. Some also remarked how Zong’s own forty-something daughter allegedly is not married herself.

It is not the first time for an opinion leader or expert to frame marriage and childbirth as a “contribution” to the country.  In 2015, the Chinese scholar Yang Zao (杨早) wrote an essay in which he explained China’s falling birth rates as “a clash between individualist and collectivist values.” At the time, he wrote: “For the country, for society, for parents, can’t you let go a bit of personal happiness? After all, isn’t marriage key to solving China’s present-day problems?”

Another hashtag that went viral this week is “Could Shortening Education Time Increase Birth Rates?” (#缩短教育时间能提高生育率吗#).

The topic relates to an article published by Zhejiang News on Jan. 16, 2023, about China’s Education and Population Report (中国教育和人口报告). In this report, James Jianzhang Liang (梁建章, a demographer who is better known as the Ctrip CEO) and other authors suggest that shortening the duration of education might help boost the country’s birth rates. The authors suggest that the middle and elementary education time could be cut down by two years by eliminating the Senior High School Entrance Examination (Zhongkao 中考).

There are two ways in which this idea might benefit China’s birth rates. On the one hand, the authors argue, China’s highly competitive education system puts a lot of pressure on children and financial strain on their parents, who struggle to invest as much time and money into their children’s education as they can. The pressure is real: the exam results during the last year of junior high school are of crucial importance regarding admission to the preferred senior high school, which also profoundly influences education after high school and students’ future careers. So the reasoning is that couples are more likely to have children if the financial burdens on parents are alleviated.

Should we have kids or not? Cartoon posted on Weibo.com.

On the other hand, the authors argue that when people finish school two years earlier, this will give them more time to start their life after graduation, making it more likely for women to have children at an earlier age.

One post about this topic, in which netizens were asked how they felt about the idea, received over 225,000 likes and nearly 13,000 comments.

A typical reply suggested that all these ‘experts’ should have more children themselves, reiterating a widespread criticism of opinion makers and experts who often do not practice what they preach.

Others expressed that they did not think that China’s lower birth rates were related to education, while others felt that a shortened education time would be a step back for China.

Some also criticized Zhejiang News. The media outlet itself indicated that the idea of shortening school years to boost fertility rates was like treating people as “tools.” But some commenters said: “The sad thing is not that people are treated as tools, the sad thing is that it took you this long to realize it.”

There are more Weibo bloggers and commenters suggesting that people paid a heavy price for the One Child policy that was implemented between 1980-2015, and that its effects will have a significant impact on society for a long time to come. After decades of only allowing couples to have one child, the shift to now introducing policies to encourage people to have more children is a strange reality.

One popular blogger (@峰哥亡命天涯) posted a photo that showed an old One Child Policy slogan on a building [少生优生,幸福一生 ‘Have fewer but healthier babies and a happier life‘], and he wrote: “The effects of family planning have contributed to contemporary times and bring benefits for future centuries!”

Another poster said they felt bad for the one-child generation born in the 1980s:

I really feel sorry for those born in the 1980s. They’ve always dealt with problems in attending school from young to old, then when they were all grown up faced problems with the job [market], then the issue of marrying and the bride price, and most importantly the high price of housing and caring for the elderly – the 1980s generation is carrying the burden. Those born in the 1970s can no longer have children, and those born after ’95 or 2000 are not giving birth. So we can only squeeze the post-1980s (..) Let them finally take a breather.”

By Manya Koetse 
with contributions by Zilan Qian

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China and Covid19

From Peaches to Pears: 3 Natural Food Remedies Trending on Chinese Social Media in Times of Covid Outbreak

Even though experts suggest that natural food remedies won’t prevent or cure Covid, Chinese netizens believe in the power of peaches.

Zilan Qian

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Coughing, fever, sore throat; during China’s current Covid outbreak, the ways to alleviate the most common symptoms have become an everyday topic on Chinese social media. Food remedies are a recurring trending topic. Here are three natural food remedies that have become popular (again) over the past few weeks.

In December of 2022, during the rapid spread of Covid-19 across China after the country let go of its ‘zero Covid’ policy, fever and cough medicine were selling out fast. Some Covid patients turned to foods and drinks to help soothe Covid symptoms.

The following types of food have become especially popular on Chinese social media over the past few weeks.

 

1. Canned Yellow Peaches (黄桃罐头)

In December, when the number of Covid-19 infections spiked throughout China, canned yellow peaches suddenly received significant attention. Under the Weibo hashtag “Canned Yellow Peaches, the Mysterious Power from the East” (#东方神秘力量黄桃罐头#), netizens shared how canned yellow peaches helped them recover from Covid-19, describing it as “the god of children from Northeastern China” that “blessed every Northeastern Chinese child.” Some even joked that the government should include canned yellow peaches in the public health insurance package.

Netizens praising the effect of canned yellow peaches in alleviating diseases. Image from a post on Zhihu.

Although many state media quoted experts’ claims that canned yellow peaches cannot fight Covid-19 symptoms and might even worsen coughing, most netizens still believe in the power of peaches.

While most people acknowledge that natural food remedies aren’t always effective, they are seemingly unanimously against the “experts’ advice.” Under Pengpai News’ Weibo post and hashtag “Experts Claim Canned Yellow Peaches Might Worsen Cough” (#专家称黄桃罐头或加重咳嗽#),” some Weibo users commented that experts would not dare to discuss the supposed ineffectiveness of Lianhuaqingwen (traditional Chinese medicine that has become hot-selling during Covid outbreak) and thus criticize canned peaches instead.

Another commenter wrote: “Who would actually believe that canned yellow peaches can cure diseases? It is just like a placebo when we’re sick.”

A satirical comparison of the effects between canned yellow peaches and Lianhuaqingwen.

One popular image compared the effectiveness of canned yellow peaches and Lianhuaqingwen. According to the image, the former is tasty and hydrates, while also containing electrolytes and calories and serving as comfort food to people, whereas the latter is only capable of potentially having side effects for the kidney and liver.

Canned yellow peaches are a nostalgic comfort food, especially for people from Northeastern China. For the generations growing up during the 1970s and 1980s, canned yellow peaches are known as a ‘cure-all.’ In an era of food scarcity, canned yellow peaches were a sweet luxury that most children could only get when they were ill.

One commenter on Q&A platform Zhihu wrote: “Eating canned yellow peaches is a ritual.” Other netizens shared their childhood memories about the food – one commenter recalled how eating canned yellow peaches at the hospital after a car accident left a deep impression on them.

A Weibo post sharing ‘yellow peaches’ childhood memories. The user wrote about parents bringing canned yellow peaches as a gift for relatives who were ill: “At that time, we associated cans (of yellow peaches) with being sick.” (Originally from a Zhihu post.)

A supermarket sale of canned yellow peaches. The Chinese characters say “táoguò yìqíng,” actually meaning “escaping the pandemic,” but as a word joke, táo is written with character 桃 for peaches instead of 逃 for escape. Image from a Zhihu post.

Moreover, the name of the food has also come to be associated with recovering from Covid. As the character ‘桃’ (peach) sounds the same as the character ‘逃’ (escape), eating canned yellow peaches is also jokingly used in the context of ‘escaping’ from the epidemic.

 

2. Steamed Orange with Salt (盐蒸橙子)

Another food that gained popularity during the Covid-19 outbreak is steamed orange with salt, which is considered a more medicinal food remedy than canned yellow peaches. The food has since long been used as a Chinese folk prescription for sore throat. The widespread Covid-19 symptom of severe sore throat, sometimes also described as “swallowing blades” (喉咙吞刀片),” has made the folk prescription popular again.

Here is the cooking procedure according to many online posts: wash and soak the orange in salted water; cut the orange at ⅕ point from the top; spread ⅓ spoon of salt onto the remaining ⅘ oranges; put two parts of the orange together and steam (steaming time varies between posts from 20 min up to two hours); eat the orange with the peel and the rest of the water.

Contrary to canned yellow peaches, experts have acknowledged the benefits of eating salt-steamed oranges. According to a post released by Youth Hunan (青年湖南), the official Weibo account of the Communist Youth League of Hunan Province, some ‘experts’ state that the peel of salt-steamed oranges help alleviate discomforts in the throat, and the vitamin C can prevent and alleviate viral infections. In reports by other mainstream media, such as CCTV News, it is also claimed that salt-steamed oranges might be helpful, and that the salt can make the natural sugar taste sweeter.

However, steamed oranges with salt are not as beloved among the public as canned yellow peaches. People’s comments on the effectiveness of salty steamed oranges vary. Some share that they stopped coughing after eating them, while others criticize it as having “no use at all,” or even exacerbating the pain.

Despite the disagreement on its effectiveness, most Weibo posts agree that steamed oranges with salt are just “not tasty” at all. Contrary to the CCTV report that suggested that salt brings out the sweetness of oranges, many describe the food as extremely bitter and sour to the extent of “crying while eating.”

In online discussions about steamed oranges with salt, the distrust in expert opinions surfaced again. Although experts claim that the food is beneficial and alleviates symptoms, some netizens seem annoyed that it does not do anything for them at all: “I’ve been eating this for three days, not a damn change and it tastes disgusting.”

 

3. Stewed Pear with Rock Sugar (冰糖炖梨)

Besides canned yellow peaches and salty steamed oranges, many other kinds of food and folk prescriptions have also become trends during the Covid-19 outbreak. There’s salt-steamed lemons (盐蒸柠檬), boiled scallion water (葱白煮水), roasted oranges (烤橘子), white radish soup (萝卜汤), honeysuckle chrysanthemum tea (金銀花菊花茶) or brown sugar ginger tea (红糖姜茶), which is also commonly used to alleviate menstrual pain.

Among them, you’ll also find stewed pear with rock sugar (冰糖炖梨), which is commonly eaten to alleviate symptoms like sore throat and coughing as well reducing excessive phlegm. Many netizens indicate that it is something their parents made for them, and that it is sweet, warm, and comforting.

Recipes vary, but the pears, generally yellow pears (雪梨), can be either cooked or boiled and its core is then removed and filled with rock sugar as well as other optional ingredients, such as Chinese dates, dried Goji berries, or Sichuan peppers (see a recipe here).

Despite many people expressing their love for stewed pear with rock sugar, a recent article by the Taiwanese ‘Health 2.0’ site claimed that the food remedy is somewhat outdated as other ingredients are supposedly more effective against a persistent cough, such as daikon (combined with honey, rock sugar), which is also used as a home remedy for its antibacterial properties.

The advantages of many foods and folk prescriptions are still up for debate. However, recent related online discussions show that the comfort or even the placebo effect of certain food remedies are very important in the Covid-19 experience of many Chinese people. Some are 100% sure they work.

“One bite and it instantly made me feel better,” one commenter wrote about their homemade stewed pear. Some people admit they do not necessarily even mind if it really alleviates their symptoms or not: “It’s just so tasty!”

By Zilan Qian
with contributions by Manya Koetse

 

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