Friday, December 2, 2011

Wealth outflow: Most of China's rich seeking to emigrate


According to the Private Banking White Paper 2011 released on Oct. 29 by the China-based Hurun Research Institute together with the Bank of China, one of the country's big four state-owned commercial banks, more than half of the individuals in China whose assets exceed 10 million yuan (US$1.57 million) plan to emigrate abroad.
The white paper showed there are 960,000 people in China whose assets exceed 10 million yuan, while the number of the people with assets over 100 million yuan (US$15.7 million) is 60,000. 60% of these wealthy individuals intend to emigrate or are already completing immigration applications. Among them, 70% are from eastern and southern parts of China.
A manager surnamed Zhou at an agency handling immigration affairs in China told a reporter from the Shandong-based Luzhong Morning News that emigrating does not mean these individuals have to renounce their Chinese nationality. It should be clarified that many Chinese who emigrate abroad actually only want to become permanent residents in foreign countries and still retain their Chinese nationality. The difference between being a citizen and a permanent resident lies in having or not having the right to vote, stand for election and the obligation to undertake military service if it exists.
Among the more than one thousand cases of immigration processed by Zhou, 80% chose not to become a citizen of the country to which they emigrated.
Zhou said that it is not permitted in China to have dual nationality, and thus it is difficult for those who move overseas to make the decision to renounce their Chinese nationality. "Of course, we don't encourage them to, either," Zhou said.
One of the motivations for Chinese people to emigrate is the desire to give their children the advantage of an overseas education. According to the National Business Daily, a news agency mainly for small and medium enterprises in China, statistics offered by a company for studying abroad and immigration showed that the purpose of the 58% of investment immigration was to allow their children receive an overseas education.
The United States, Britain and Canada are seen to provide better education systems and resources. Moreover, it is easier for a permanent resident of these countries to gain entry to their famous universities. What is more, being a permanent resident allows one to spend less on studies than a foreign nation holding a student visa.
A woman in Beijing who said she is applying to emigrate to Canada told the National Business Daily that studying abroad would allow her children to avoid the great pressure and limitations of studying in China while at the same time they would be able to grow up learning both English and French in Quebec.
Another purpose for emigrating is for the security of one's assets. Many emigrants transfer their families abroad first and then their assets, Zheng Zhuo, a successful businessman who moved to Singapore, told the National Business Daily. He said only when people feel secure about their assets will they start to pursue educational and social benefits. Many wealthy Chinese people transfer their assets abroad in order to increase them through more lucrative leveraging opportunities in other countries.
References
Hurun 胡潤
Zheng Zhuo 鄭卓
Source: Want China Times