Purchasing home to go abroad? Investment for golden visa by Chinese
2017-05-16 10:47:00

More than 100,000 Chinese have poured at least 24 billion US dollars in the last decade into "golden visa" programs across the world that offer residence in exchange for investment. Nowhere is Chinese demand greater than in the US, which has taken in at least 7.7 billion dollars from more than 40,000 Chinese investors in the past decade.

"Investing 500,000 US Dollars, getting American green cards for the whole family" are the key words Henry Global Consulting Group (HGCG) is using to lure Chinese investors to put their money into American real estate projects funded through the US investor visa program which has become increasingly controversial.

HGCG is only one of the thousands of agencies operating in China to provide investment immigration consulting and facilitatory services. The US and Canada are by far the two most popular destinations, issuing 76,000 visas to investors and their families over the past decade.

The US EB-5 program gives green cards to anyone who invests 500,000 dollars in a business that creates or "saves" at least 10 jobs. By AP's count, it has drawn at least 7.7 billion dollars over the past decade from Chinese individuals.

Many investors said they don't want their children to struggle in China's rigid and intensely competitive education system, which critics say emphasizes rote learning and can stifle creativity. Other factors are thought to be that China's upper-middle-class families are becoming increasingly restless, as cities remain choked by smog, home prices multiply year-on-year, and schools impose ever-greater pressure on their children.

More than 100,000 Chinese in the last decade have chosen to become investors in "golden visa" programs around the world, with the number tripling between 2010 and 2015. The increase over this period saw an estimated 27 billion dollars pour into the United States, Canada, and a dozen other countries offering residence for investment, an Associated Press analysis has found.

The key to their spending power is China's real estate boom. Real estate prices in China's largest cities have more than tripled in the last decade, with prices in Beijing rising by an average of 25 percent a year during that time. A family that gained ownership of an ordinary apartment more than a decade ago can now sell it for the price of a "golden visa." As their dissatisfaction with China's problems grows, more families are choosing to do so.

"With the price appreciation, they now have the means to invest and there is growing dissatisfaction with other factors, including the pressures on education, pollution, foods safety," said Steven Hendryx, Senior Vice President at HGCG.

The challenge for China, which doesn't recognize dual nationality, is that if it can't keep entrepreneurs and middle-class families from leaving, consequently it will lose talent and capital that could have been focussed at home, said Chen Zhiwu, an economist at the University of Hong Kong.

"Those government interventions have made the expropriation of private assets and private resources relatively easy to do. So that's the scary part, which has made business owners feeling more insecure than before," said Chen.

The huge growth of Chinese demand has pushed some countries to toughen their investment requirements or, in Canada's case, cut off applications altogether. In the United States, federal investigators said in April they found at least three Chinese investors who obtained green cards through the program were fugitives wanted by Beijing.

Separately, more than a dozen separate multimillion-dollar fraud cases in the last five years have involved hundreds of Chinese investors, some of whom have had their residency in the US thrown into jeopardy after their projects failed.

Source:CGTN Editor:Hiram