China's rapid development has bettered the livelihoods of many Chinese, even through the global recession. But many of China's wealthiest citizens are now heading overseas with their money, raising concerns about the effects on the economy.
The Chinese International Migration Annual Report 2012 finds that the richest Chinese have become increasingly interested in opportunities to invest capital overseas.
China's Globalization Research Center for Social Sciences documented China's wealth migration patterns in the International Talent Blue Book, which states that 27 percent of Chinese billionaires have already moved overseas, while an additional 47 percent are considering it. The trend has been labeled “investment immigration.”
Those who have set their sights overseas are often private business owners and senior corporate staff, generally between the ages of 30 and 45, and are considered members of China's economic and intellectual elite, rather than the typical middle-class emigrant.
The China Daily reported that 50 percent of investment immigration projects worth at least a half million dollars in the United States are being pitched by Chinese, according to Qi Lixin, chairman of China's Entry and Exit Services, who works with Chinese looking to invest overseas. Aside from the United States, investments are also concentrated in Canada and Australia.
Wan Huiyao, director of the Center for the Study of Globalization, said such money usually ends up in real estate and foreign currency. The main reason people have moved their money overseas, he said, is to invest in a more secure and regulated investment environment while also seeking a higher quality of life.
A country with a legal system that protects private property is also a lure for moving overseas.
While understanding the reasons behind the desire to emigrate, Wan is concerned about how it will affect the Chinese economy.
"The private economy contributes more than 60 percent of China's GDP and it absorbs a majority of employees. So if private business owners emigrate with their capital, it would mean less investment in the domestic market, so fewer jobs would be created," Wang explained.
The negative effects of investment immigration will be felt more profoundly in poorer, less developed areas that rely heavily on the private sector to boost their local economies.
As China competes as a global power, China's elite have reaped the benefits of the nation's still comparatively robust economy. However, the appeal of Western nations’ diversified and regulated economies are still attracting much of China's wealth overseas.
Michelle FlorCruz joined IBTimes in October of 2012 and has special interest in stories relating to politics, business and culture in China and other areas of Asia....