According to the report from Economic Voice, in the 10 years following 1999, 2 million people in China legally obtained foreign green cards. This marks the third wave of investment immigration in China, following the first wave of immigration in the early 1980s and the technical immigration wave in the early 1990s.
In contrast, the main body of this wave of immigration consists of social elites and new wealthy classes, with investment being the primary means of emigration. Therefore, this expanding wave of immigrants is also referred to as the investment migration wave. In fact, the pace of Chinese citizens migrating overseas has indeed been accelerating. Data from various immigration bureaus show that China has become a significant source country for investment immigration. The latest report from China Merchants Bank in 2011 indicates that 500,000 individuals in China have invested assets exceeding 10 million yuan, and nearly 60% of surveyed mainland millionaires have completed or are considering investment immigration, with this trend being particularly evident among individuals with investable assets exceeding 100 million yuan.
Furthermore, other data indicate that the personal overseas assets of Chinese citizens have been rapidly increasing in recent years. What are the driving forces behind this wave of wealthy immigration? Could it lead to a large-scale outflow of talent and capital? Economic Voice's special commentator Liu Ge provides his insights on this matter.
Investment immigration purposes: Children's education and business.
Host: According to statistics, the main force behind this wave of immigration in the new century is the new rich class above the middle-income level. Hence, investment immigration has become mainstream. Please analyze the primary purposes of this group of investment immigrants moving overseas.
Liu Ge: On one hand, it may be related to children's education. Obtaining residency can provide many advantages for children when studying abroad, whether in high school, middle school, or university. Additionally, their considerations may also stem from business opportunities.
Host: Business, education, and safety. In fact, more and more wealthy individuals hold green cards but live and work in China, which means they are immigrants without leaving their country. Is it fair to say this implies making money in China and spending it abroad?
Liu Ge: I don't think so. Unlike previous immigration waves, which were primarily about venturing out into the world, today's focus is more on asset holders. The reality is that the easiest place to make money and the most significant business opportunities currently exist in China. Therefore, many individuals go abroad merely to obtain a residency status. With convenient transportation and communication nowadays, this has turned into a very effective channel, allowing them to enjoy the benefits of both sides—seizing the money-making opportunities in China while also reaping the various benefits offered by developed countries. The most straightforward benefit is that obtaining residency in a developed country allows for visa-free travel to many nations, which is very convenient. From an economic standpoint, this is a rational choice that can yield benefits from all sides.
Host: They are unwilling to miss out on the golden opportunity presented by China's economic development, while also enjoying a high quality of life abroad, and can return to invest in China and benefit from domestic favorable policies.
Liu Ge: Exactly.
Concerns about the outflow of talent from China are exaggerated.
Host: Conservative estimates suggest that last year alone, the amount of immigration capital flowing out of China reached 10 billion yuan. Some believe that the outpouring of wealth by billionaires to foreign countries undoubtedly represents a loss for China's economy. If this trend is not reversed, China may not only experience capital outflow but also the risk of hollowing out. Is the situation really that severe?
Liu Ge: I think this perspective is somewhat overstated. Since we open our market to allow others in, the other side of openness means we can also go out. Although some may not fully agree with this wave of immigration, objectively, it has also facilitated the process of Chinese enterprises and capital moving overseas. For large enterprises, facing various policy barriers when investing abroad, going through the individual route of immigration to transfer assets overseas allows them to establish businesses and engage in Sino-foreign trade. Therefore, I think viewing this as a loss of capital is exaggerated.
Host: The perspective should be broader.
Liu Ge: Exactly.
Host: Will this lead to a loss of talent?
Liu Ge: I believe there is a phenomenon where, on one hand, increasing numbers of people are emigrating while, on the other, many are returning. Many people from the first and second waves of immigration have now returned to the country in different capacities, engaging in research, investment, and various fields. Hence, I think there is no need for concern. As long as China's market continues to develop steadily and we provide various opportunities for talent and capital, talent and opportunities will gravitate there.
Host: The key is whether this market has enough attraction.
Liu Ge: Exactly.
Host: Do you think the overall situation is more advantageous or disadvantageous?
Liu Ge: I believe, overall, there are both advantages and disadvantages, but from the current perspective, I personally see no reason for concern, and it should be more favorable than unfavorable.
