China's Wealthiest Invest Overseas, And Move With Their Money
By Michelle FlorCruz | December 21, 2012 5:34 AM EST
The livelihoods of many Chinese people have improved as China's economy prospered, even after a global recession. However, many of China's wealthiest citizens are now heading overseas with their money, worrying those who think the mass emigration may affect the nation's economy.
According to the Chinese International Migration Annual Report 2012, China's wealthiest people have become increasingly interested in opportunities to invest capital overseas.
China's Globalization Research Center for Social Sciences documented China's wealth migration patterns in the International Talent Blue Book which said 27 percent of Chinese billionaires have already moved overseas, while an additional 47 percent are considering it. The recent trend has sparked what is called “investment immigration.”
These people who have set their sights overseas are often private business owners and senior corporate staff, generally between the ages of 30-45 and are considered to be part of China's affluent and intellectual elite, rather than the typical ‘middle-class’ immigrant population.
The China Daily reported that 50 percent of investment immigration projects worth at least a half million dollars in the United States are being pitched by the Chinese, according to the Chairman of China's Entry and Exit Services Qi Lixin, who works with various Chinese agencies looking to invest overseas. Aside from the United States, investments are also concentrated in Canada and Australia.
Wan Huiyao, director of the Center for the Study of Globalization, said such money usually ends up in the real estate and foreign currency. The main reason people have moved their money overseas, he said, is to invest in a more secure and regulated investment environment while also seeking a higher quality of life.
A country with a legal system with private property protection is also a likely lure for moving overseas.
While understanding the reasons behind the desire to emigrate, Wan is also concerned about how it will affect the Chinese economy.
"The private economy contributes more than 60 percent of China's GDP and it absorbs a majority of employees. So if private business owners emigrate with their capital, it would mean less investment in the domestic market, so fewer jobs would be created," Wang explained.
The negative effects of investment immigration will be felt more profoundly in poorer, less developed areas that rely heavily on the private sector to boost local economy.
As China competes as a global power, China's elite have reaped the benefits of the nation's still comparatively robust economy. However, the appeal of western nations’ diversified and regulated economies are still attracting much of China's wealth overseas.
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