Editor’s note: This translated article appeared in People’s Daily on April 21. The article highlights the results of a recent survey which revealed that an overwhelming number of wealthy Chinese are considering immigrating abroad or have already done so.  The decision to immigrate often necessitates large investments in the target country, fueling a growing trend by mainland Chinese to invest abroad.

As reported by Hong Kong-based Wen Hui Daily, China Merchants Bank and Bain Capital recently issued a joint report on private wealth in China, predicting that the number of “wealthy” mainland Chinese will reach 590,000 this year and their collective personal investment capital will reach 180 trillion RMB. The survey discovered that these wealthy Chinese are very interested in investing in markets overseas and in opportunities to immigrate by investing abroad. In recent years, investment overseas has increased exponentially, especially in Hong Kong where about one half of overseas investments are located. The increasing number of wealthy mainlanders has brought huge opportunities to Hong Kong’s stock market, real estate market, and to the area’s potential for investment immigration.

The report points out: investment overseas is already a clear focal point for wealthy Chinese. From 2008 to 2010, investment abroad increased by 100% annually. As a main destination for private investment overseas, Hong Kong saw foreign investments from mainland China increase by over 70% annually, accounting for one half of China’s investment abroad. As many wealthy Chinese move to create increasingly global asset allocations  and to fill requirements for investment immigration, 2011 is forecast as a grand year for rapid increases in investment abroad.

The quest for foreign citizenship

Over the past few years, an increasing number of Chinese people are choosing to invest abroad in order to obtain foreign citizenship. The U.S., for example, has witnessed a 73% increase in the number of investment immigrants from China in the past five years alone. Faced with the rapidly increasing number of immigration candidates from China, some countries have even been forced to raise their requirements for investment immigration. Last year, Canada increased the minimum investment requirement for investment immigration candidates from 800,000 RMB to 1.6 million RMB.

Nearly 60% of the wealthy mainland Chinese surveyed had either already immigrated by investing abroad or had considered this type of immigration. This trend was especially apparent in the wealthiest survey participants, those with at least 100 million RMB in private investment capital. About 27% of participants in this group had already successfully immigrated by investing abroad, and about 47% were considering it. Children’s education, savings security, and preparation for retirement were listed as the main reasons for immigrating.

According to Christfund Securities researcher Liang Yuan, Hong Kong, a place most wealthy mainlanders are familiar with, is a natural focal point in the frenzy to invest abroad. This means big opportunities for Hong Kong. As a global marketplace with vast resources of available financial products including stocks, funds, warrants, and index futures among countless others, Hong Kong has attracted many mainland investors, especially in RMB investments. In the future, Hong Kong will continue to provide a much-sought after investment channel for mainlanders wishing to turn a profit on the capital they’ve already obtained elsewhere.

At the same time, as wealthy mainlanders invest in and immigrate to Hong Kong, the luxury real estate market of this port city is sure to see considerable benefits. Recent mainland restrictions on housing purchases are also sure to divert a portion of investment into the Hong Kong real estate market. This trend is evident in recent property sales in the New Territores of Hong Kong, where 10-20% were bought by mainland Chinese.
 

Source: People’s Daily Online
 

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Keywords: Investment Immigration China Chinese investment in Hong Kong Chinese investment abroad