Money may be able to buy many things, but even China’s ultra wealthy can’t instantly make their country’s air cleaner, its food safer, or its schools on par with the likes of Harvard. It can buy something almost as good, however: a visa to a foreign country to avoid all of these issues at home.
A report published on June 6 by Hurun Report and immigration consultancy Visas Consulting Group on the emigration habits of Chinese high-net-worth-individuals (HNWIs) finds that a growing number of them are taking advantage of investment visa programs to escape serious problems that the majority of China’s population has no choice but to deal with.
According to Hurun statistics released in January, the rate of Chinese HNWIs who have emigrated or want to do so increased to 64 percent in 2013, marking an increase over the previous year’s 60 percent. The newly released survey of 141 individuals moving abroad or in the process of doing so finds that quality of education, pollution, and food safety are the top three reasons for emigration among this group, followed by social welfare and medical care standards.
Visa access abroad does not come cheap, however. Members of this elite fraction of society often secure entry to foreign countries through special investment visa programs that require them to pour a significant amount of money into the host country’s local economy. For example, the United States’ EB-5 visa program offers a green card to anyone who invests $1 million in the U.S. economy (or $500,000 in a high-unemployment area) and provides at least 10 jobs to American workers. As a result, the hope of being able to emigrate is the third-highest reason for China’s wealthy to invest abroad, and overseas investments account for an average of 16 percent of Chinese emigrants’ total wealth. Chinese citizens are the main beneficiaries of the U.S. program, taking up 80 percent of all EB-5 visas offered in 2012.
While the United States and Canada are currently the top destinations for China’s rich, Canada is likely to drop far down the list in the coming years now that it has canceled its own investor visa program. In February, Canada’s authorities abruptly decided to end the practice of awarding visas in exchange for a six-figure loan to the government and stopped processing more than 60,000 pending applications. The announcement prompted a lawsuit against Canada’s immigration office by 1,400 incensed Chinese applicants claiming that their applications had not been handled properly.
While Canada argued that the change came in part because there was “little evidence that immigrant investors as a class are maintaining ties to Canada,” the report finds that most Chinese HNWIs planning a move abroad are considering making it permanent: 66 percent who have emigrated or are planning to do so said they might try to get a foreign passport. Their main investment interest is real estate, with 70 percent of those surveyed looking for properties abroad to live in compared to 30 percent searching for purely investment-related reasons.
The report finds that although China’s rich are willing to spend big to move to a foreign country, they do feel that the U.S. price of $1 million is a bit steep. Instead, they consider a more modest 5 million RMB (about US$803,000) to be an “appropriate” amount required for investment immigration.