China's mainstream public opinion almost unequivocally believes that China is experiencing a wave of migration; it is said that there are a number of objective studies indicating this. For example, a report by China International Immigration Report in 2012 points out that 27% of ultra-high-net-worth business owners with personal assets exceeding RMB 100 million had immigrated, and 47% were considering doing so. Of the high net worth individuals with personal assets of more than RMB 10 million, nearly 60% had completed investment migration or had relevant considerations. Such statistics are sufficient to show that China is experiencing the third large-scale "overseas migration".
It is certain that such reports would cause an uproar in the Chinese society. Many have concluded that wealth is rapidly withdrawing from China, and the rich have lost confidence in the country; the third wave of migration is in full swing. Of course, those who are more extreme would label the Chinese migrants to other countries as "traitors".
But things are still happening objectively. Overseas statistics show that between 2002 and 2011, a total of 280,000 Chinese became the U.S. citizens. This is only the United States, if the number of Chinese migrants to Canada, Australia, the United Kingdom, New Zealand, and other is counted, this number will surely make everyone stunned. This makes it necessary to think more realistically and objectively observe what direction the Chinese society is developing into.
Migration costs money. Let us compare the investment requirements in migrating to different countries; New Zealand needs about RMB 2.7 million, the United States RMB 3.2 million, Australia RMB 3.3 million, Canada RMB 5.2 million, and Singapore more than RMB 13 million. It can be seen that even for multi-millionaires, investment restrictions in some countries are not a small amount.
In April 2011, China Merchants Bank's 2011 China Private Wealth Report also stated that nearly 60% of the multi-millionaires surveyed have completed investment migration or have related considerations. Among the billionaires (with more than RMB 100 million investable assets), about 27% have already completed investment migration. It appears that most of the Chinese migrants are still the so-called "rich people". The question is why do these rich people want to migrate? What are the objective qualities of their migration requirements?
Anbound has been tracking this issue for a long period of time and the answer is that from the perspective of economic analysis, the so-called "overseas migration" in China is actually only a wave of overseas private investment in China. The reasons for this situation are mainly two. First, in China, the "guo jin min tui", translates roughly as "state advances, private sector retreats" in the past years, although not recognized by official public opinion, it is a reality. The narrowing of the space for private investment forces private individual investors seeking new territories and spaces, and the migration has driven investment and education at the same time, which is relatively multi-revenue and one of the important reasons for the formation of China's overseas investment boom. Another important reason is the appreciation of the RMB. The curve of the appreciation of the RMB is highly consistent with the curve of the number of Chinese immigrants overseas. The RMB is now more and more valuable, and hence it is very cost-effective to go abroad to buy assets. Why should the Chinese bother a fiercely competitive market? Why should the capital be consumed in China, where prices are rising? These are the issues that private investors must face.
Singapore understood earlier even than China itself that the Chinese migration overseas is actually a kind of investment wave. It is for this reason that a small city-state like Singapore set its investment threshold higher than that of the United States, up to RMB 13 million, close to 2.5 times the U.S. investment immigration. What Singaporeans thought of is simple; the more Chinese investment the better. As for the impact on Singapore, this investment amount specified can also solve certain issues.
It is not just China. Japan has experienced many migration waves in its history with the development of the economy, as early as 150 years ago, more than ten years after the Opium War. At that time, Japan and the West had increasingly closer contact, especially with the United States. The Japanese government has adopted clear and positive support for immigration and signed the Kanagawa Treaty with the United States. Since then, many Japanese have gone to the United States to study or do business. In 1866, the Japanese government specifically stipulated that anyone who went abroad to study and do business could apply for a Japanese passport. That is to say, Japan and the United States have no restrictions on "immigration." Since then, there had been many immigration surges in Japan, including the tide of immigrants from farmers to South America. Most of the immigration to South America was by Japanese farmers who have lost their land.
The question is, should Chinese investment in overseas investment be linked to migration?
The answer to this question is actually related to China's domestic transformation and reform. In the past, there were not many examples of Chinese private investment overseas that could be effectively protected by the Chinese government. Things might get better in the future, but this always requires a process. Therefore, migration naturalization and investment have an added sense of security. In addition, the educational factor is also very important. Obviously, the language problem and the grasp of the social situation are related to the success of the investment. In the globalized world today, naturally education is linked with investment.
Therefore, from an economic point of view, China's overseas migration wave is actually just a wave of investment by private investors.
Final analysis conclusion:
The migration of the Chinese is actually a wave of investment by private investors. Although this answer is somewhat unexpected, it is in line with the actual situation. Some people think that if children move overseas after investing, they will start to use their children as a platform to transfer large amounts of wealth abroad. This view is debatable. Even if China wants to take control of such an issue, it would be a question of the effectiveness of state governance, and should not affect the progress of this investment. In fact, the world now regards Chinese migration as a wave of investment and business; only China does not see it this way.
