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UPDATED: January 23, 2011 NO. 4 JANUARY 27, 2011
Journey to the West
Successful entrepreneurs and professionals lead a new emigration boom

Li, who is helping her son prepare for his application for a public university in California, says she hopes her son's green card holder status will give him an advantage during the application.

Like Li, parents who worry about the psychological tolls on their children from the fierce competitions to enter key schools and prestigious universities in China have made up a big part of China's emigration demands.

"Once a family obtains immigrant visas, the children can apply for universities in the adopted country more easily, have more majors to choose from and more internship opportunities. In many families, one parent will continue their career in China while the other parent will accompany the child to study abroad," said Wang Wei, a consultant with a Shanghai-based immigration consultancy company.

Zhao Moji, an immigration consultant, told Shanghai-based Xinmin Weekly that an increasing number of her clients is China's "rich second generation" who have had the experience of studying abroad.

"They often think about moving abroad right after their children were born. They want foreign citizenship for their children before they reach school age so that they can choose to enter international schools in China or go abroad to study at a young age," Zhao said.

Liu Jianyu, another Shanghai-based immigration consultant, told Xinmin Weekly if a Chinese family wants their children to receive education in Canada, immigrating by investment is cheaper than paying the tuitions as a foreign student. Liu said the saved education costs plus government childcare subsidies could amount up to more than 1.4 million yuan ($210,000) if the family moved to Canada right after the child's birth.

"The earlier you immigrate and the more children you have, the easier for you to earn your investment back," said Liu.

Elite drain alert

He Minghui, President of a Guangzhou-based immigration consultancy company, said the new generation of emigrants from Guangdong Province are different from their predecessors. While previous emigrants, mainly farmers, didn't come back to visit for years, since it took them several years of hard work to save the air fare. The new emigrants travel as often as once every week between China and their adopted countries. They often have businesses and family members in both countries.

Besides seeking better quality education for their children, expanding their businesses globally has become another important factor for private company owners to apply for foreign permanent residency or citizenship.

Citizenship changes might also help China's new billionaires avoid taxes through enjoying incentives for foreign enterprises. For example, once a Chinese mainland resident obtains Hong Kong permanent residency, his or her individual income taxes will be cut off by 15 percent when investing on the mainland.

"I don't think nationality change means these wealthy people are no longer loyal to China. We can see them extend their helping hands whenever necessary, such as providing emergency relief to survivors of the major earthquake in Wenchuan in May 2008," said Qi of Beijing East J&P Star Consulting Co. Ltd.

However, some people worry the emigration boom has caused a drain of capital and social elites, which will harm China's development in the long run.

"The new emigrants are different from those who moved abroad decades ago since many are well-educated professionals. Now the emigrants are much more rational and that's where our attentions should be focused, "Hu Weilue, a scholar with the Chinese Academy of Social Sciences, told Guangdong-based The Time Weekly.

Wu Xiaobo, a financial columnist, told the Economic Information Daily that the rising willingness for China's wealthy classes to move abroad has a lot to do with the unfavorable operational environment of the country's private companies.

Wu said that the expansion of state-owned enterprises at the expense of private investment since 2004 has left private company owners with fewer destinations to invest their money in. He said when private entrepreneurs withdrew from the manufacturing sector and planned to move up to banking and energy sectors, they were deeply disappointed by the strong state monopoly in both.

Wu said that the legitimacy of private entrepreneurs' wealth had been questioned by the masses, who believe that almost all of the entrepreneurs made their stake money through illegal means, such as evading taxes.

"To reverse the trend of capital drain, we should first make our entrepreneurs feel reassured about their future in China by further improving our market economy and encouraging entrepreneurship," said Wu. "Many people feel ambivalent about their decision to move abroad. On the one hand, they believe China has the best development prospects among all countries. On the other hand, they feel unsafe and upset about the limitations to invest in banking and energy sectors. Therefore, we need to further our reforms to increase their sense of fairness and security."

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