Monday, October 21, 2013

As many as 46 per cent of Chinese with assets worth more than RMB10 million (US$1.57 million) are considering moving abroad. Another 14 per cent have begun the process. Chinese people’s desire to emigrate stems from dissatisfaction with life in China and by the prospect of a better life abroad.

Said a study published by the Bank of China and Hurun Report. The first destination of their liking is Singapore due to its economic stability and high quality bilingual education system. Additional advantages of Singapore include its nearness to Beijing and the language. It takes just six hour to fly to Beijing and Mandarin is spoken almost everywhere in Singapore. Wealthy Chinese have perhaps no choice but to look beyond China because of the restrictions imposed on buying property in some 40 cities. There is also a limit on the number of houses that people can own and new property taxes have been introduced in major cities like Shanghai.

According to this study, High Net Worth Individuals (HNWIs) in China, whose number has increased exponentially during the fast few years, have started feeling uncomfortable with the overall deteriorating quality of life in large cities and complaining about rising pollution and inadequate health care facilities. Surveys and visa numbers show that members of China's wealthy elite are heading for the exits in search of things money can't buy in China.

According to the Harun's 2013 Wealth Report there are 1.05 million millionaires (whose assets are more than 10 million RMB) while the number of super rich, whose assets are over 100 million, has reached 64,500. 
Students attend the commencement ceremony
for Green River Community College at the
ShoWare Center in Kent, Washington, on June 14
Deng Yu/China Daily

A large number for wealthy Chinese who plan to emigrate have already made investments abroad and sent their children for studies abroad. 80% Chinese rich want to send their children abroad for education most of them before they reach university age or senior high school level. The US, UK and Canada continue to remain top three destinations of their choice. The study observes that more people are also now choosing Switzerland, which has overtaken Australia, to the fourth place. Japan, on the other hand, has fallen out of the top 10. 

With regard increasing trend of emigration of Chinese rich, the report says : "Institutionalized corruption has created a culture of dishonesty and negligence that extends to hospitals and schools, where bribing doctors and teachers has become the norm. HNWIs’ greatest fear is that if the history repeats itself, and a redistribution of wealth is carried out (a worst-case scenario), then only international investments can protect their wealth." These fears emanate from the imagination that their country can face major political unrest in coming years.

However, in order to obtain Singaporean citizenship, or even residency, a family must invest 5 million Singaporean dollars (US$3.8 million) which is quite substantial. A large number of Chinese, therefore, are routing their emigration plans via two tiny island nation of St Kitts and Nevis in the Caribbean which offers cheaper citizenship plans through investment programs. St Kitts and Nevis is an independent Commonwealth Realm – like Australia – and its citizens enjoy the same visa-free travel to the UK, Ireland, Canada and all EU countries that Australians do. This option turns out to be quite attractive because Chinese passport holders face lot of travel restrictions by other countries as well as their own. St Kitts and Nevis citizenship, obtainable in just five months, provides them virtually visa-free travel.
Claire van den Heever

Buying government-approved real estate for between US$400,000 and US$1 million is one way to become a citizen of St Kitts and Nevis, but only a small proportion of people – estimated at 10 percent – tend to take that route because property in St Kitts and Nevis is overvalued. The more affordable, and equally quick and easy, process of obtaining citizenship is to make a once off donation of between US$200,000 and US$250,000 to a government approved project. This option is more popular and about 90 percent of applicants go for it. 

Mr Oleg Lemeshko, a consultant for immigration and second citizenship specialist, Elma Global, has been quoted saying that : "The most difficult decision Chinese nationals face is whether they are willing to give up the nationality they were born with; China does not recognize dual citizenship. Fortunately, this is not a dilemma that new St Kitts and Nevis citizens have to face. Unlike Singapore, St Kitts and Nevis does allow dual citizenship, leaving it up to Chinese nationals to report – or not to report – their newly acquired passport to the PRC."

"Increasing number of Chinese are buying homes in Phuket (Thailand) and Dubai also. Chinese rank sixth for the number of villa-style properties bought by foreigners in Dubai. In the eyes of mainland Chinese, Hong Kong is, perhaps, the least exotic of islands – after all, it is part of China. Getting their money out of China – insofar as “China” is a separate jurisdiction – is far more important to the super rich than moving there," writes Claire van den Heever in her article

American real estate market, which is one of the most transparent in the world, also presents opportunities for wealthy Chinese. In fact, they have been buying residential properties in the U.S. for a number of years now, largely in cash, recently more and more Chinese real estate investors are thinking in terms of yields and returns, and considering commercial real estate. Number of EB-5 visas issued has nearly doubled each year since 2009, in large part because of demand from wealthy Chinese. But that's also led to rising fraud. According to the U.S. Citizenship and Immigration Services agency, which oversees the program, about 80% of the 7,641 EB-5 visas issued in the last fiscal year went to Chinese investors and their immediate families. However, many scams have been reported that are blocking Chinese investors' path to U.S. green cards.

The U.S., Canada and Britain, as well as smaller nations like the Caribbean islands of Antigua and St. Kitts, all encourage applications. Still, these programs can be both expensive and difficult to navigate. Applicants who made their start-up capital in the heady and legally ambiguous days of privatization can be the hardest to explain. Chinese HNWIs almost always want to chose U.S. citizenship for their children and have a strong desire, to have children educated in the United States. Most wealthy Chinese say they want a safe refuse overseas because they fear they will the targets of public or government anger if there were any major social unrest in China. There is also a perception that their wealth will be better protected in countries with a stronger rule of law.
Pic : U.S. Citizenship & Immigration Services poster

According to a recent newsreport in the Daily Mail, "Rich Chinese couples are paying as much as $120,000 for 'designer' American babies to help get Green Cards and to bypass their nation's restrictive 'One Child' policy." Wealthy Chinese are hiring American women to serve as surrogates for their children. Chinese elite who want a baby outside the country's restrictive family planning policies, who are unable to conceive themselves, or who are seeking U.S. citizenship for their children are increasingly using the services offered by various surrogacy agencies in China and the United States. Emigration as a family is another draw - U.S. citizens may apply for Green Cards for their parents when they turn 21."

Currently 3.6 million Chinese people live in the United States - 430,000 of them in the San Francisco Bay Area. That is more than 1 percent of the U.S. population.

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