By Chao Xinrui and Wang Shulan (巢新蕊，王淑兰)
Issue 608, Feb 25, 2013
Market, page 18
Translated by Zhu Na
Original article: [Chinese]

It’s been said that China’s rich are all either emigrating or planning to emigrate.

That may not be much of an exaggeration. In 2011, of those Chinese with personal assets of over 100 million yuan, 27 percent had already emigrated and 47 percent were considering emigration, according to The Annual Report on Chinese International Migration (2012), jointly issued by the Center for China & Globalization (CCG) and the Beijing Institute of Technology School of Law
 
The report showed that China is experiencing a third wave of large-scale emigration. Since the economic crisis of 2008, European and American countries have tightened policies on admitting skilled immigrants, but investment immigration policy has been relaxed.

Wang Huiyao (王辉耀), director of CCG and one of the editors of the International Migration report, said that in the past three years, Chinese who used overseas investment in order to obtain permanent residence in other countries took at least $15 billion out of China with them.

According to research by Wang Huiyao and others, 3,000 Chinese emigrated to the U.S. and Canada in 2009 with their total investments exceeding 8 billion yuan. In 2011, that number had climbed to an estimated 10,000 people.

Over 80 percent of investment immigrants surveyed in the report cited children’s education as the main reason for migrating, making it the most compelling factor. 43 percent considered protection of their wealth as the second most important draw.  Seeking a higher quality of life, being allowed to have more children and low tax rates were also frequently mentioned.

In most cases, the minimum requirement to secure an investment visa to the U.S. is $500,000 and the creation of ten jobs. “[$500,000] is only the amount needed to meet the investment project requirement,” says Zhou Mi (周密), deputy director of the Institute of Outward Investment and Cooperation Research Department of International Labor Cooperation. “It doesn’t include the cost of purchasing houses, education fees for children, living and traveling costs. If were all added up, it would be much more.”

Wang Huiyao says that the money and human resources flow in to China has been far smaller than the outflow. This is partly because gaining permanent residence in China though investment remains difficult. Since the Chinese permanent residence system was introduced in 2004, less than 5,000 Chinese “green cards” of any kind have been granted. This compares to about 120,000 per year in the U.S.

Wang Huiyao said that China’s investment migrants overseas tend toward real estate, foreign currency and stocks. According to the 2011 China Private Wealth Management White Book jointly issued by Hurun and Bank of China, 51 percent of the investment volume by high net worth customers overseas flowed into real estate and 28 percent went into foreign currency.

Liu Guofu (刘国福), another of the editors of the International Migration report, says some of the money from investment migrants is going into overseas mining fields. But for small and medium-sized enterprises investing in China, policy is lacking compared to foreign countries. State-owned enterprises still dominate things like oil fields, so if private enterprises want to get involved, usually either the investment threshold is too high or the approval process is too complicated. 

The International Migration report showed that since 2007, the U.S. has been the main immigration designation. A report issued by U.S. Citizenship and Immigration Services (USCIS) shows that 1,016 investment visas were granted to citizens of Mainland China in 2010 representing 41 percent of the total visas granted in that category that year.

The report also showed that in 2010, 7,255 Chinese emigrated to the major immigration counties of Australia, the U.S., Canada and New Zealand. 

Wang Huiyao says that the assets transferred overseas each year not only create employment problems for China, but also affect the country’s tax revenue. And the loss of wealth has a more significant negative impact on small and medium-sized cities than on large cities. 

Zhou Mi says that the impact of investment migration from China needs to be considered from many angles. In the context of economic globalization, investment migration is one way to liberalize global trade. China has to face this issue. When enterprises go abroad to invest, more and more capital and human resources will flow out as well.

“How to minimize the negative impacts and get talented people who’ve gone abroad to contribute to the development of China’s economy is very important,” Zhou said. “Investment migration doesn’t only mean changing nationality.”

Links and Sources
Beijing News: 我国亿元富翁近3成已移民 47%正考虑移民