Chinese Millionaires Eye U.S. for Immigration, Investment

Chinese Millionaires Eye U.S. for Immigration, Investment

Wealthy Chinese Continue to Buy U.S. Real Estate for InvestmentFor the fourth year in a row, the U.S. tops the list of favored destinations for a sizable number of wealthy Chinese individuals who wish to leave their country. Ireland and Canada placed second and third, respectively.

The statistics are interesting: 224 Chinese nationals with an average net worth of $4.5 million were surveyed. Seventy percent of them already have foreign assets, primarily property, accounting for approximately 11 percent of their wealth, with a consensus among respondents that foreign investment at about 25 percent would be desirable. Education and the environment top the list of concerns for those considering emigration, according to the Hurun Report, released on June 30, 2018. Strict Chinese government controls in China are also are a reason to leave.

Fourteen percent of the respondents already consider themselves to be global citizens, with diversified holdings, financial freedom and the freedom to travel visa-free, as well as overseas education as the defining characteristics.

What Attracts Chinese Immigrants

Today, the United States is viewed as desirable to wealthy immigrants because of its relative "ease of adaptability," including minimally restrictive visa-free travel, environmental initiatives and food safety regulations, and the recent tax cut. Another draw is the availability of real estate for investment.

Survey respondents rank their overseas property investments in terms of cost-effectiveness, overall value and permanent property rights. Canada slipped from its former second-place rank as a desirable destination due to more stringent real estate tax requirements and a change this year to its investment visa program, according to CNBC.

Wealthy Chinese investors look to real estate as a way to protect and grow their wealth, and an uptick of interest in commercial investment is anticipated in light of political rumblings about limits on technology company investment. The purchase of expensive homes in West Coast cities, notably Vancouver, British Columbia, and Los Angeles, San Francisco and Seattle, is slowing somewhat due to more restrictive requirements, rapidly escalating costs and tighter markets. Los Angeles still leads the list for real estate investment, however.

New York and California are currently home to approximately half the total population of Chinese in the country. Even though the favored cities for new Chinese arrivals are still are predominately coastal, many show interest in Chicago, IL; Philadelphia, PN; and Houston, TX. It is not a stretch to think that major mid-country population centers like Austin, Dallas, Las Vegas, Atlanta and Minneapolis will become more attractive for wealthy investors. They boast healthy market activity and moderate pricing for both residential and commercial properties.

Historical Perspective

Chinese immigrants are the third-largest foreign-born population group arriving in the U.S., reaching 2.3 million in 2016, according to the Migration Policy Institute (MPI).

It hasn't always been so, but today residents of Chinese descent account for five percent of the total 44 million immigrant population. The 1965 U.S. Immigration Act introduced changes that eased the path for non-European entry, resulting in a six-fold immigration increase since 1980, following the normalization of relations between China and the U.S. in 1979.

The United States is home to 22 percent of the 11 million Chinese who live outside China, in Ramsey County and elsewhere. They are, for the most part, educated and employable. Approximately one third of the legally-admitted immigrants to the United States over the past decades obtained that status through employment.

Even though the United States is today's "country of choice" for wealthy Chinese immigration, 90 percent of those considering it still look upon China as their chosen country for retirement.

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