Economy may suffer as rich look overseas
Updated: 2012-12-18 07:53
By Chen Xin in Beijing and Yu Ran in Shanghai (China Daily)
Investment immigration has 'potential to damage growth'
The growing number of Chinese opting for investment immigration could damage employment and rural economies in their homeland, a new report warns.
Wealthy Chinese are increasingly eying opportunities to move capital abroad, according to the 2012 Annual Report on Chinese International Migration released on Monday.
About 50 percent of investment immigration projects each worth $500,000 in the United States are being pitched by agencies in China, Qi Lixin, chairman of the Beijing Entry and Exit Service Association, was quoted as saying in the report.
Immigrant investors in China are mainly private business owners, self-employed groups and senior corporate management staff aged 35 to 55, said the report, released by the Center for China and Globalization and the Beijing Institute of Technology.
"The private economy contributes more than 60 percent of China's GDP and it absorbs a majority of employees. So if private business owners emigrate with their capital, it would mean less investment in the domestic market, so fewer jobs would be created," said Wang Huiyao, director of the Center for China and Globalization.
Investment immigration also brings proportionally bigger economic losses in less developed areas than in big cities because the economies in those areas are mainly bolstered by the private sector, the report added.
In 2011, more than 150,000 Chinese emigrated to destinations such as the United States, Canada, Australia and New Zealand, it said. The United States was the top destination for Chinese immigrants and some 87,000 permanent residence permits were granted in 2011. Of these, 3,340 were approved through investment.
A dairy production investment project in South Dakota attracted $30 million from 60 immigrant investors and created 878 jobs, said the report.
China is one of the major sources of investment immigration for Canada, and Chinese applicants accounted for 75 percent of the North American country's investment immigration in the past three years, according to the report.
From 2008 to 2011, nearly 17,000 Chinese were granted immigrant visas in Australia via investment, and they accounted for nearly 60 percent of the total the country allowed for foreigners.
A survey by China Merchants Bank and consultants Bain & Co in 2011 found that 60 percent of Chinese people with 10 million yuan ($1.6 million) or more were considering investment immigration.
Children's education and security of assets were the main reasons for their immigration, it said.
The report also found that many Chinese opt to stay in China after they acquire permanent residency in foreign countries.
For 38-year-old Liang Jiehui, moving to enjoy a quiet and pleasant family life in Canada is his ultimate goal.
He and his wife obtained permanent residency through investing in property in Canada in 2007 and their son was born there a year later. However, the family still lives in Shanghai.
"We emigrated to Canada to ensure that we will live and my son will grow up there after I retire in a few years," said Liang, who owns a clothes-trading company in Shanghai.
He added that to provide a better life for his son, he and his wife chose to stay in China to make more money through trading, which is the family's only source of income.
Making sure that his son will get used to life abroad, Liang sent the 4-year-old boy to kindergarten at an international school in Shanghai, where most of his classmates are foreigners.
"We're making preparations to move to Canada. My son has to learn Chinese and English as his compulsory languages now," he said.
Making plans to move the whole family to Australia in two to three years is what 31-year-old Cui Yu has been busily working on. She gave birth to a daughter nine months ago.
"I have discussed the plan with my husband, and we reached the conclusion that if we want to provide a better education and living environment with more career choices for our children, immigration is the best solution," Cui said.
Cui works at an advertising company in Shanghai and her husband is the owner of a logistics company shipping chemical products.
The family wants to invest in an industry related to what Cui's husband is doing in Australia as a means to get permanent residency.
The migration report said that applicants for investment immigration are mainly from Beijing, Shanghai and coastal provinces such as Zhejiang, Guangdong and Jiangsu.
Rich residents of second-tier cities such as Dalian, Qingdao, Tianjin and Chongqing applying for investment immigration have also increased in recent years, it said.
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(China Daily 12/18/2012 page1)