Surge in Rich Chinese Who “Invest” in U.S. Citizenship

[IndoCarib]

By Robert Frank

Despite all the talk of class warfare and punishing success, the U.S. remains a highly desirable place for the world’s rich. Especially for the rich Chinese.

According to data from the Immigration Service, thousands of wealthy Chinese have applied for the EB-5 Visa, also known as the “green-card-for-money” program.

Under the program, foreign investors must finance commercial projects in the U.S. by investing either $500,000 or $1 million and create at least 10 full-time jobs. The investors have to undergo a background check, identify the source of their wealth and create and sustain 10 full-time jobs. The investors and their families can get citizenship after five years if they fulfill the requirements.

Lots of rich people around the world apply. But the Chinese have become far and away the biggest users and beneficiaries.

In 2011, 2,969 Chinese citizens applied for the program and 934 were approved, according to the Immigration Service. (Approval doesn’t mean they get citizenship, it just means they can start the program). Their numbers represented more than three quarters of the total number of applicants and approvals.

It’s also a huge increase from previous years. In 2007, only 270 Chinese citizens applied and only 161 were approved, accounting for only about a third of the totals.

Why the huge increase?

The obvious reason is that China has a lot more millionaires and billionaires.

But the other reason is that these newly rich want out – or at least an escape hatch and presence in another country in case they have to flee.

A recent survey from the Bank of China and wealth researcher Hurun Report found that more than half of China’s millionaires are either considering emigrating or have already taken steps to do so.

The survey found that the most common reason cited by respondents for emigrating was their children’s education, followed by a desire for better medical treatment and the fear of pollution in China.

The top destination among those emigrating was the U.S., accounting for 40%, followed by Canada with 37%, Singapore with 14% and Europe with 11%, the survey showed.

The EB-5 program has stirred controversy for years, with some saying it’s brought welcome investment, and others saying it’’s a mercenary citizenship program that does little for actual employment.



Surge in Rich Chinese Who “Invest” in U.S. Citizenship - The Wealth Report - WSJ

 

[somebozo]

this will increase the foothold of Chinese enterpenuers in american and America-china will remain long term commercial partners regardless of how many tariffs or punishments obama administration may want to slap on china

 

[IndoCarib]

this will increase the foothold of Chinese enterpenuers in american and America-china will remain long term commercial partners regardless of how many tariffs or punishments obama administration may want to slap on china

Once they get US citizenship they dont remain Chinese entreprenuers. Obviuosly the Rich chinese want more freedom and quality of life. If they had it in China, they woudnt leave the much touted next super power

 

[boris]

this will increase the foothold of Chinese enterpenuers in american and America-china will remain long term commercial partners regardless of how many tariffs or punishments obama administration may want to slap on china

Long time back in the late 80's and early 90's Japs did use this route and ended up with a lot of investment in the US,now the chinese are doing it.

 

[oct605032048]

Once they get US citizenship they dont remain Chinese entreprenuers. Obviuosly the Rich chinese want more freedom and quality of life. If they had it in China, they woudnt leave the much touted next super power

I think they just want a passport that can travel more conveniently around the world and partly better educational opportunity for their kids. You have to work much harder and win the competition among far more smart minds to get into top universities at home as compare to in the US.

---------- Post added at 02:13 AM ---------- Previous post was at 02:13 AM ----------

US is indeed a good place for retirement.

 

[IndoCarib]

Long time back in the late 80's and early 90's Japs did use this route and ended up with a lot of investment in the US,now the chinese are doing it.

You mean this programme of 'buying' US citizenship was avialable in the 80s and 90s ?

 

[S10]

They should implement a law denying foreign citizens in purchasing residential properties in China. If these people are going to live abroad, they should not be allowed to drive up real estate prices for people in China.

 

[manojb]

Ok now all chinese people work very very hard , save money, and please lend it to uncle sam , and his grand kids who want to goto snow boarding!!!

 

[beijingwalker]

that's a wonderful thing,so Chinese may get control of US domestic economy,people all know one of the main reasons why China can have a very successful reform and became this strong is because of the unconditioned help from oversea Chinese in both money investment and other investments.people say Russia's failure of reform is because Russians dont have a huge overseas Russian group who can give the country monetary help.Chinese people have a tradition that they always funnel back their wealth back to China.and the same time,they bring back the most advanced technology back to China.China owes a big part of her success to the overseas Chinese.

Chinese are China's strength
Friday, 09 September 2011 00:26
Arindam Chaudhuri

Overseas Chinese not only pump money into China’s economy but also facilitate the fulfilment of Chinese ambitions of global cultural and political colonisation. The overseas Chinese have made themselves inimitable in all spheres of influencing official and popular perceptions of China. They also remit a lot of money home


The strength of the Chinese population can be gauged from the fact that today around 19.3 per cent of the world population is Chinese. But then, such a figure based on the law of averages hides more than what it reveals. The figure that talks volumes about the Chinese sphere of influence, at least with respect to human capital, is that of 50 million plus overseas Chinese who are settled in various parts of the world and doing their bit in accelerating the fast-paced Chinese economy.

Today, overseas Chinese not only pump money into the Chinese economy but also facilitate Chinese ambitions of global cultural and political colonisation. Overseas Chinese have made themselves inimitable in almost all spheres of influences — from heading many hard power areas by chairing vital positions in global forums, military and political institutions of many nations to being the face of various soft power areas of influence. One may not be well versed with the Chinese powers-that-be, but at the same time, very few would be not well-versed with the likes of Jackie Chan.

The emigration of Chinese dates back to the Ming dynasty, but the real wave of Chinese diaspora started in 1840s when thousands of Chinese left China and made their way to the United States, especially after the discovery of gold in California. Initially, uneducated and unemployed Chinese labourers left their homes and moved to the US (for mining and railroad jobs); but then, during the late-19th century, the scenario changed. Instead of labourers, those were skilled and educated Chinese who moved out to avoid the ill effects of poverty and famine — which were haunting China in the late-19th century.

However, this time the destination was not confined to the US or the West; many Asian nations suddenly made it to the destination list of Chinese. Among all the nations, South-East Asia and Australia (apart from the US) attracted the most Chinese immigrants. With more and more Chinese moving out of China, most of the big cities across the world saw a huge inflow of Chinese. Gradually, these people moved and settled down in a more organised manner and formed strong communities across the globe. So much so that most of the renowned cities (in almost all nations) have a China located somewhere — which today we call ‘Chinatown’.

A Chinatown by no means is just another shopping destination but is a hub of overseas Chinese in a particular city. This is one place where overseas Chinese and local residents can find everything that China manufactures. It is basically a one-stop-solution for all overseas Chinese when it comes to purchasing Chinese products, and above all, being close to their roots. Given the economies it generates, it’s a fact that in many nations, Chinatowns are of mammoth proportions — for example, the Cherkizovsky Market was considered the largest in Europe in July 2009, the Moscow Government decided to replace it with a Chinatown shopping centre.

China is reportedly investing $1 billion in the construction that would give employment to 70,000 overseas Chinese directly and would allow China to sell products worth a whopping $5 billion. Leading the race, Dubai is all set to construct the world’s biggest Chinatown spread across an area of 800 hectare — it’s worth around $47 million.

There are around four major, recognised Chinatowns in Africa, over 35 in Asia, over 30 in UK and Europe, 15 in Latin America and over 50 in the US and Canada besides hundreds of more such markets across the world. Most of the goods sold in Chinatowns are imported from China (thus, pumping back huge revenues into China). Additionally, millions of Chinese working in these communities send more millions back home to their families.

The remittance doesn’t end here. Besides millions of dollars flowing in through non-official and unorganised channels (in smaller denominations), overseas Chinese billionaires donate millions to the Chinese Government through official and transparent routes. Li Ka Shing has recently donated a medical university to China; many such donations and relief funds (during disasters) are common for China.

The cultural and family ties play a major factor in this and the overseas Chinese are largely driven by the verve to do something for their motherland. It might not be a panacea, but this solidarity of overseas Chinese towards their families back home has helped the Chinese economy to a great extent. The 55 million overseas Chinese across 135 countries contribute nearly 60 per cent to the total Chinese FDIs.

China’s total foreign reserves were around $194 billion and total FDI was $61 billion (in the year 2004) with a GDP growth of 10.7 per cent (in 2006). The preceding decade (1990-2000) too experienced a rapid progress with average annual growth rate of 9.6 per cent mainly because of its diaspora’s benefactor-effect. The contribution of overseas Chinese in development of their homeland is a matter of historical and cultural patriotism.

Between 1985 and 2008, foreign investment in China reached a figure of $898 billion making it the foremost nation in the world to attract foreign investment for 18 consecutive years. OECD estimates reveal that a resounding 45 per cent of foreign investment in 2004 came from overseas Chinese. In 2010, the FDI figures rose to a record breaking $105.7 billion. By August 2011, China’s forex reserves had reached $3.2 trillion.

All thanks to the deep-running cultural roots that create a propensity for the diaspora to invest or establish business networks with their hometown. In Xinjiang Province for instance, many entrepreneurial initiatives have been taken based on not only the Government compensation but also on the remittances from the overseas relatives of entrepreneurs. Therefore, migrant business networks are fully exploited by the diaspora with the help of cultural and ethnic linkages for the overall development of mainland China.

In 2006, overseas Chinese sent $22.5 billion to China as remittance, a figure which is now estimated to be more than $50 billion every year. The Chinese diaspora generate more than $500 billion in South-East Asia alone and are playing a very pivotal role in the development of the Chinese economy. A huge part of this money is being redirected as remittances and donations; and to this extent, this community helps in the formation of a bridge that allows overseas and domestic Chinese to share intellectual and investment know-how and thus opens avenues of business opportunities.

The diaspora too are received with conscientious warmth and encouragement by the Chinese authorities as cross-border migration is greatly encouraged and their experiences are shared with the local population. The Chinese Government realised that this point needs to be driven home with the diaspora — therefore, they opened up a special Cabinet Ministry to solely deal with overseas Chinese.

As compensation for the damage caused by Mao Tse-tung during the Cultural Revolution by dissolving the ‘Overseas Chinese Affairs Commission’, the commission was reopened in 1978 with the name changed to ‘Overseas Chinese Affairs Office’. A new federation was also opened in 1978 (All-China Federation of Returned Overseas Chinese) to help the overseas population integrate with their families and help in the transfer of funds

The writer is a management guru and Editor, The Sunday Indian.

 

[shjliu]

Once they get US citizenship they dont remain Chinese entreprenuers. Obviuosly the Rich chinese want more freedom and quality of life. If they had it in China, they woudnt leave the much touted next super power

regarding EB-5, do you know how long does it take for the person invest in it to get US citizenship? since those investors who invested half a million or one million in USA, how much they can make in China for the same period of time? China have great opportunities now, I saw so many millionaires get their status in US or Canada, but give up and go back to China within first year.