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

Surge in Rich Chinese Who ‘Invest’ in U.S. Citizenship

By Robert Frank

Despite all the talk of class warfare and punishing success, the U.S. remains a highly desirable place for the world’s rich. Especially for the rich Chinese.

Reuters

Newly minted U.S. citizens

According to data from the Immigration Service, thousands of wealthy Chinese have applied for the EB-5 Visa, also known as the “green-card-for-money” program.

Under the program, foreign investors must finance commercial projects in the U.S. by investing either $500,000 or $1 million and create at least 10 full-time jobs. The investors have to undergo a background check, identify the source of their wealth and create and sustain 10 full-time jobs. The investors and their families can get citizenship after five years if they fulfill the requirements.

Lots of rich people around the world apply. But the Chinese have become far and away the biggest users and beneficiaries.

In 2011, 2,969 Chinese citizens applied for the program and 934 were approved, according to the Immigration Service. (Approval doesn’t mean they get citizenship, it just means they can start the program).  Their numbers represented more than three quarters of the total number of applicants and approvals.

It’s also a huge increase from previous years. In 2007, only 270 Chinese citizens applied and only 161 were approved, accounting for only about a third of the totals.

Why the huge increase?

The obvious reason is that China has a lot more millionaires and billionaires.

But the other reason is that these newly rich want out – or at least an escape hatch and presence in another country in case they have to flee.

A recent survey from the Bank of China and wealth researcher Hurun Report found that more than half of China’s millionaires are either considering emigrating or have already taken steps to do so.

The survey found that the most common reason cited by respondents for emigrating was their children’s education, followed by a desire for better medical treatment and the fear of pollution in China.

The top destination among those emigrating was the U.S., accounting for 40%, followed by Canada with 37%, Singapore with 14% and Europe with 11%, the survey showed.

The EB-5 program has stirred controversy for years, with some saying it’s brought welcome investment, and others saying it’’s a mercenary citizenship program that does little for actual employment.