Posted on 04/22/2011 12:28:53 PM PDT by SeekAndFind
More and more Chinese millionaires are investing overseas, and many are doing so in order to immigrate to another country, a new report showed Wednesday.
The 2011 Private Wealth Report, published by China Merchants Bank and business consulting firm Bain & Company, showed that the number of high net worth individuals (HNWIs) in China exceeded 500,000 in 2010, 19 percent more than in 2009.
According to the study, those who have at least 10 million yuan ($1.53 million) worth of individual assets (financial assets, not including their primary residence) available for investment are defined as HNWIs. Among that group, nearly 60 percent are either considering emigration through investment overseas or are already finalizing the process.
Among those with at least 100 million yuan in individual investment assets, 27 percent have already emigrated, and 47 percent are considering leaving China.
The report concluded that "investment immigration" is becoming a trend on the mainland, highlighted by a 73 percent compound annual growth rate of those whose investments helped them immigrate to the US in the past five years.
The result is in line with statistics from another agency. According to the Beijing Entry & Exit Service Association, more than 1,000 people applied for investment immigration to the US in 2009, doubling the figure from 2008.
The report was based on a survey of 2,600 HNWIs, studies with more than 100 analysts and some third-party data.
There are three major reasons behind rich people's immigration: a better education for children, safety of personal wealth and a preparation for retirement, the report showed.
Zhong Dajun, director of the Beijing Dajun Institute for Economic Observation, told the Global Times that the wave of investment immigration of rich people is a wealth drain that has to be stopped.
"We have been working hard to develop the economy in the past 30 years, but now these elite members of society are fleeing with the majority of the wealth. The loss may be even higher than all the foreign investment we have attracted. It is as if, when the time of harvest comes, we find the fruits have all gone to others' baskets," Zhong said.
A report by the China Youth Daily pointed out that, taking into account education and pensions, feelings of insecurity are the major factor prodding rich people to emigrate.
Despite their huge wealth, many of them rely heavily on connections with authorities, but an administrative monopoly in China often puts them in a disadvantageous position in the market. Meanwhile, their connections with authorities make them easy victims of corruption charges and become targets of the public, the newspaper said.
A luxury jewelry trader from Zhejiang Province, who is now doing business in Hong Kong, told the Global Times on condition of anonymity that he also worries about economic bubbles on the mainland amid reports of inflation and drops in housing prices.
According to the 2011 Private Wealth Report, HNWIs have invested 13.7 percent of their total funds in the real estate market this year, a 3.9 percent drop from 2009, after the government tightened control over the property market and repeatedly promised to contain home prices.
Xia Xueluan, an expert on civil administration and a sociologist at Peking University, said, "We can only hope the rich people stay out of patriotism."
"The government has started to improve the wealth-distribution system in the face of the income disparity, but the process will take some time," Xia told the Global Times, adding that the yawning gap between the rich and poor has also fueled anti-rich sentiment in society, thus making billionaires feel even more unsafe. "Those rich people should ask themselves before they leave, 'Should I desert the motherland and people by putting money into others' hands?'" Xia added Thursday.
The China Youth Daily offered some solutions to stop the rich emigration, including supporting their philanthropic activity, and allowing them to fairly compete in industries that are usually affected by the administrative monopoly, such as education.
Meanwhile, Western countries are eying the rapidly growing number of China's rich people.
A new property development in Seattle's Federal Way neighborhood was recently opened to the public, and it was specially designed for investing immigrants, local media reports said.
Immigrating to? (entering)
How about Emigrating to? (leaving)
Also see here :
Real Estate Prices And Demographics: Implication For China
EXCERPTS...
Unfortunately, ageing is likely to cause another problem for China. This one will be in the real estate sector.
SNIP
Elod Takát of the Bank of International Settlement (BIS) wrote a paper back in August 2010 titled “Ageing and asset price” (H/T to Leith van Onselen). The study examined the possible impact of ageing to real estate prices. Between 1970-2009 as the baby boomers grew up, they drove real estate prices up in all but one English Speaking country (that one was the United Kingdom of Great Britain and Northern Ireland).
In the United States, for instance, he estimated that the demographic “tailwind” for the real estate prices in the past 40 years was roughly 80 basis points per year relative to neutral demographics. However, as ageing continues, most countries will face demographic “headwinds”. In the case of the United States, he estimated that the headwinds will be roughly 80 basis points a year relative to neutral demographics. In other words, real estate prices in most countries with ageing populations will be declining in the long-run.
What is the implication for China? China will be ageing rapidly. While the one-child policy helped China to have a rapid increase of working-age population relative to total population in the past 30 years or so, the demographic dividend would have ended in 2010. Both working-age population as a percentage of total population and the so-called “Net Investors” cohort relative to total population has peaked in 2010, and are both declining rapidly.
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It seems to me that an overpopulated Nation would not mind losing people to other countries ..as long as they still held some allegiance to their homeland..
I always thought that one could not leave China at will .. so how do they manage this ?
Yep. Was my first thought, but was afraid of being one of the grammar/english police. LOL Thanks for that.
It seems to me that an overpopulated Nation would not mind losing people to other countries ..as long as they still held some allegiance to their homeland..
I always thought that one could not leave China at will .. so how do they manage this ?
Its still COMMUNIST China...no matter how much the Free Trader Communists sugar-coat it
China has major demographic issues...which will be good for the USA....because eventually the Free Trade Communists will no longer have any economic motive to move jobs to Communist China
Of course, many Free Trade Communists are quite supportive of Communist China....and ignore the damaging effects Free Trade with Communist China has had on America....they are probably dumb enough to stay because they are...Communists
I go to a local Universities dental school for my dental work.. the student I have this year is Chinese . She said that she had come to the US as a teen ager to go to an American HS.. She has an uncle that is a US citizen that lives in NYC , she lived with him.
I asked her if she plans to return home when she graduates next year.. she told me that she had one visit home, and it no longer felt like home..her home is here now .
I was somewhat surprised that they would allow a teen to come here, and allow trips home at her will ...
So I have wondered if they are more open to the people leaving then I had believed
I would gladly trade an impoverished Somali in Minnesota and an illegal Mexican in Arizona for every wealthy Chinaman they care to send us. Would also throw in as many U.S. hating American nationals as we can fool them into taking.
Imagine accumulating a significant amount of wealth in a country that believes they have the moral right to take it away from you.
Wait a minute, what country was I talking about?
They all move to Calif. and become wealthy dishwashers for minimum wage.
The idea of a strict separation between childhood and adulthood is pretty much a 20th century phenom, even in the West. In the Orient, and certainly in China, children have traditionally been viewed as little adults. Even in the city, kids are left to their own devices from an early age, since most parents do not have the luxury of arranging for child care on their relatively paltry wages. What's worse, the single-child policy has deprived most parents of modest means the option of having older kids take care of younger siblings. Bottom line - many of these kids are extremely independent, because they don't really have a choice.
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