Wealthy Chinese flock to the West

Image by williamcho via Flickr

By Chris Hogg BBC Shanghai Correspondent

Growing numbers of rich Chinese are applying for permanent residency in Western countries under programmes that allow investors with a high net worth to "buy" citizenship.

The number of Chinese investors granted permanent residency in Canada has doubled in two years.
Ottawa has now halted all applications to its federal immigrant investor programme while it consults on plans to double the funds needed to obtain a visa.
Applicants are still allowed to apply to a scheme run by the province of Quebec, however,
And at seminars run by visa consultancy firms in China, advisers are encouraging people to apply for the scheme before Quebec also doubles its minimum requirements to match the federal government's proposals.
Cash and experience

  The average age is 40 to 45, says visa consultant Vincent Chen

On a rainy Saturday afternoon, in a conference room at a five-star Shanghai hotel, more than 30 potential "investor applicants" arrive to hear how they might be able to exchange their cash for a foreign passport.
Many are in their 30s. There are several young couples. Most are professionals. Few are dressed smartly. They appear to be a pretty average cross-section of Shanghai's moneyed middle class.
They are shown a video that the visa company has made to promote Canada, and the country's visa application service.
"You don't have to worry about integrating," the video's commentary declares. "You don't even need to speak English."
Then the advisers go through the detail.
The Quebec scheme requires applicants to show they have a net worth of C$800,000 (US$776,000; £502,000) and they must invest up to C$400,000.
They also need to show they have had two years' experience in management.
Different requirements That's considerably cheaper, they point out, than the UK, which requires investors to invest £1m ($1.5m) for five years.

 

There are pros and cons of each of the countries' schemes.
Canada's applications currently take about two-and-a-half years, but the financial requirements are the lowest in the world.
The United States requires applicants to invest up to $1m (£646,000) in a business that creates at least 10 new jobs. Applications take up to one-and-a-half years.
The UK's application process is the quickest. It can be completed in just three months, according to the visa consultants at the seminar, and there is no interview.
But it is also the most costly.
"Usually, the applicants are business owners or senior managers," explains Vincent Chen, senior consultant for the Visa Consulting Group.
"The average age is 40 to 45, but it's getting younger."
Easily achievable Canada has not changed its "immigrant investor" programme requirements since 1991.

  Some just want the passport before they move back to China

"Back then, C$800,000 was a huge amount," Mr Chen says.
"But now, with the increases in property prices in cities like Shanghai, people don't think it's that hard to achieve.
"That's why you've seen the numbers granted permanent residency have doubled."
Other factors are also at work here.
Increasingly, those who come to the seminars have friends who have already emigrated.

Reasons to move
David Lu, 38, a manager in a telecommunications company, has come to the seminar to find out more about how to apply to move to Canada.

End Quote Dr Wang Huiyao Centre for China and Globalisation

At the end of the session he starts filling in the forms eagerly.
He has positive reasons to move. Some of his relatives already live in Canada. And during holidays there he has enjoyed the lower pollution levels there.
Also, he says, the Canadians are "a lot more relaxed" than the Chinese.
There are other reasons though why he wants to leave China.
"People hate you [here] if you have money, and the rich bully the poor," he says.
"Another issue for me is health care," he adds.
"I don't think anyone interested in moving abroad would worry about the costs. We want their better quality medical care."

Brain drain
Fabio Xu, 30, runs a paint company in Shanghai.
He says he wants to move to the US "because of the better medical care there, and better educational opportunities for my child".
"In China, all my money goes on my mortgage, food, clothing and travel," he says, "but in the States there's generally more freedom. I would be able to develop myself more creatively and get more out of life."
Some Chinese academics worry that China is losing its brightest and most able citizens, as well as huge amounts of money.
Last year 1,823 investors were granted citizenship in Canada under the immigrant investor programme.
Even if they had only invested the minimum amount required, that would mean almost US$700m had been taken out of the country.
"China is losing the talent it really needs," says Dr Wang Huiyao, the director general of the Centre for China and Globalisation.
"As China tries to develop its economy and change it from 'made in China' to 'created in China', it needs these people to build the country."
In touch with China Dr Wang believes many people want a foreign passport because it is so hard to travel freely around the world on Chinese documents.
Indeed, one woman at the seminar is anxious to know how quickly she could get her Canadian passport, so she could return home to China.
For her it appears the motivation is not to get a new home abroad, but to obtain a passport that might make life more convenient.
A Western diplomat in Shanghai offers another explanation for the increase in these kinds of visa applications.
The internet, he says, means you can live abroad, but never leave China.
"You can wake up in the morning and browse the People's Daily online over breakfast. You can trade your stocks on the Shanghai exchange with the click of a mouse," he says.
"You can chat all day to relatives for free on Skype, or run your business remotely."
His point is that emigration is no longer necessarily the emotional wrench that it once was for people.
The need to assimilate in their adopted country for practical reasons is not as great as it once was - which in itself could yet pose its own challenges for Western societies.

Related articles by Zemanta

• Wealthy Chinese house hunting in Vancouver (globaltvbc.com)
• Vancouver becoming destination for house-hunting tours from China (canada.com)
• Vancouver becoming tourist destination for house-hunting Chinese (financialpost.com)
• Chinese entrepreneurs in Africa, land of a billion customers (danwei.org)
• Following the great (stock market) leader - China (ftalphaville.ft.com)
• In Beijing, Three (or 8) Roommates Is Not a Crowd (time.com)
• Chinese luxury wannabes try to shake off "Made in China" image (reuters.com)
• The Third Wave (theglobeandmail.com)

Chinese Paving the Road to Freedom With Cash

Image via Wikipedia

By DIDI KIRSTEN TATLOW

Published: August 5, 2010

BEIJING — “They’re all millionaires. They’ve made it,” said Mikael Charette of the thousands of wealthy Chinese — his clients — who apply to emigrate to Canada every year on that country’s investment immigration program.
As part of his job, Mr. Charette, a lawyer from Montreal, scrutinizes clients’ financial records. Back in 2005, when he began working at Harvey Law Group in Beijing, he was struck by how often a family’s wealth began with the transfer of the assets of state-owned enterprises to private ownership in the 1990s. Over the course of about eight years, he estimates, those factories became fully profitable.
“Now, I look back over a decade of records, and I see that the factory is running itself. The money of the family is in the second generation, and the children are often already overseas-educated, and they, too, own real estate here,” he said.
But regardless of how wealthy they become, China’s new rich simply don’t feel secure.
“I’ve had rich businessmen say to me, ‘You can be a tiger, but there is always a hunter somewhere,”’ he said.
So they come to Mr. Charette, who specializes in investment immigration to his home province of Quebec. Or they go to other lawyers dealing in immigration to major destinations like the United States, Australia, Singapore, New Zealand and Hong Kong.
Unsolicited text messages from immigration firms have become a standard feature of life for Beijing’s upper-middle classes.
“Zero-risk emigration to America: Invest in an Idaho gold mine. For the first time in Beijing the governor himself will explain how, officially,” ran one, supplying a time and date for the meeting. “Emigrate to Australia for $200,000, 95 percent success rate, free education, generous welfare,” ran another.
In just over three decades, China has gone from being one of the poorest countries in the world to its third-biggest economy. Per capita gross domestic product in 1975 was $410. In 2009, it was $6,567, according to the World Bank.
The Hurun Rich List, based in Shanghai, says there are now 875,000 known dollar millionaires in China, an increase of 6.1 percent from a year ago.
Yet even as China grows richer, the number of its rich choosing to emigrate is rising. Many want to maintain two homes, merging their money-making abilities in China with what they perceive as the greater security and ease of international travel offered by a foreign passport or permanent residency.
Last year, for the first time, Chinese citizens became the largest group of immigrants to Australia, displacing the traditional sources of Britain and New Zealand. From July to December 2009, 13,371 Chinese became “permanent additions” (gaining or entitled to permanent residency) to Australia, overtaking Britain’s 13,037 and New Zealand’s 7,342.
While most immigrants are admitted on the basis of sought-after skills or to reunite families, investment immigration, in which applicants make a minimum financial investment or create jobs in their destination, is also booming. So much so that Canada, excluding Quebec, temporarily halted its program in June in order to double the amount that would-be immigrants must invest to qualify. Whereas before applicants required a net worth of 800,000 Canadian dollars, or about $790,000, and a 400,000-dollar investment, in the future they will need 1.6 million dollars and an investment of 800,000 dollars.
“All these changes are because we are overloaded,” Mr. Charette said. “This is a huge, sophisticated market.”
The result for Mr. Charette has been gratifying — a surge in applications to Quebec. He estimates that the window of opportunity will last until October, when Quebec, too, will adjust its policies. In February, 233 people from around Asia applied to the program, he said. In June, the month the national program closed, the number was 519. Chinese constitute up to 85 percent of applicants.
On June 26, the same day the rest of Canada temporarily closed doors, Mr. Charette addressed about 40 would-be investment immigrants in Beijing. The middle-aged men and women listened intently, most taking notes.
The looming higher rates “shouldn’t be a problem for my friends,” murmured Ms. Hou, who did not want to be identified by her full name and said she was with the People’s Liberation Army, representing rich property developers from the city of Xinxiang, in the central province of Henan.
Would she also emigrate, if she could? “Yes,” she said immediately.
Why? After all, China’s living standard is rising as the rest of the world watches the apparent success of the so-called “Beijing Model” — authoritarian politics plus fast economic growth.
Her answers mirrored those given by other would-be emigrants: Better education for the children; a pollution-free environment; better medical care; a safer food supply; bigger and cheaper housing. Added up, they are what psychologists and sociologists dub Q.O.L., or quality of life issues, factors not measured by G.D.P.
“Education is very important,” offered another woman at the seminar. “It’s different over there, and it produces different values.”
Did the current economic crisis in the West put her off?
“Not really,” she said. “They talk about it in the papers here, but I don’t know if they’re telling the truth. I trust my friends, and my friends say things aren’t that bad.”
Joy Xi emigrated to Canada nearly a decade ago. When I asked why people leave, despite rising prosperity in China, her answer was swift: “Sanlu,” the company notorious for producing melamine-laced milk powder that killed six babies and sickened hundreds of thousands more in 2008. Few believe the problem is over.
Also, said Ms. Xi, China is growing richer, but it’s also growing more unequal, and that makes the rich feel unsafe.
Summing up how many Chinese think, she cited a widespread saying: “Life in China is too risky. Consider carefully where you want to be reborn in your next life.”

Related articles by Zemanta

• Wealth in China (bbc.co.uk)
• China's economy poised to overtake Japan's (msnbc.msn.com)
• Milestone for China as Economy Passes Japan's (time.com)
• Chinese entrepreneurs in Africa, land of a billion customers (danwei.org)