China's super rich show doubt about country's economic future
Some 60 percent of China's wealthiest are thinking of leaving - and many have already put money away offshore.
A lot of foreigners seem to think that the world’s economic future belongs to China, but the Chinese super rich are not so sure. And their doubts could spell trouble for the Chinese economic miracle.Skip to next paragraph
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A report just published by Bain and Company, an international consultancy, finds that almost 60 percent of China’s wealthiest individuals are thinking of leaving the country: They have either secured permanent resident status abroad or are considering it.
They are already moving their money. Private Chinese offshore assets quadrupled between 2008 and 2010, the report says.
And if China’s economy sours, those multimillionaires could knock a dangerous hole in the country’s massive foreign exchange reserves by moving even a relatively small proportion of their money abroad, according to research presented earlier this month by Victor Shih, an economist at Northwestern University in Chicago.
The ranks of the mega-rich are swelling fast in China. Forbes magazine this week put 213 billionaires on its new China Rich List, and the Bain study estimates that there will be more than 590,000 Chinese with over $1.5 million in investable assets by the end of this year.
Immigrant investor status abroad
Bain estimates that the number of “high net worth individuals,” seeking immigrant investor status abroad – essentially buying foreign residence rights with large investments under government programs – has risen by 73 percent over the past five years.
In the past two years China has become the largest market for EP-5 visas to the United States, which give holders the right to live there, and apply for citizenship, if they invest $500,000 in a business in an underdeveloped region that creates 10 jobs for two years.
“Chinese interest is very high for several reasons,” says Brian Su, a business consultant who specializes in EP-5 visas for Chinese citizens. “The top reason is personal security… and they also want to diversify their investments outside China.”