Daily Archives

From the United States and Canada to small islands in Europe and the Caribbean, Chinese are spending billions on new passports and visas to move their families away from their homeland.

China’s middle and upper classes are demanding better schools, cleaner air and a more secure life for their children. And as China gets wealthier, millions of families have the means to purchase a new life elsewhere.

Their demand has transformed a once obscure market for immigration by investment. To study China’s impact, the Associated Press collected statistics from 13 countries that offer citizenship or permanent residency for a price.

Here’s a look at AP’s analysis of the market, by the numbers.

China’s favorite programs

Consulting firms in China’s biggest cities hawk investor visa programs in weekly sessions at hotels and on social media. The market leader is the United States, as urban Chinese are widely familiar with American schools and culture.

Here are the five countries in the AP’s analysis with the most visas issued to Chinese investors and their families in the last decade:

— 43,448: the United States’ investment visa program, known as EB-5.

— 35,278: Canada’s investment bond programs, including a program offered by the province of Quebec.

— 7,875: Portugal’s “golden visa” program for real estate investors.

— 6,405: Hungary’s residence bond program, recently suspended by the government.

— 4,640: Australia’s program for high-dollar “significant investors.”

What they buy

Depending on the country, Chinese investors looking for a second home can join business projects, invest in bonds or make an outright payment to the government. Currency conversions are as of May 11.

— $250,000: the minimum price of citizenship in Antigua & Barbuda for an investor who donates to the island government’s development fund and pays a $50,000 government fee.

— $380,000 (350,000 euro): the minimum value of real estate investors must purchase in Portugal’s “golden visa” program.

— $500,000: the minimum business investment in the United States’ EB-5 program, with a “green card” given to investors whose money creates or saves 10 jobs.

— $584,000 (800,000 Canadian dollars): the minimum amount of interest-free investment to be made or financed for residence in the Canadian province of Quebec. (Canada closed a similar national program in 2014.)

— $3.7 million (5 million Australian dollars): the required investment in Australia’s Significant Investor Visa program in a mix of developing businesses and funds as defined by the government. Australia’s program is by far the most expensive in the AP survey.

What they spent

To understand how China has changed the global investor migration market, the AP estimated how much Chinese families have invested at a minimum in foreign countries for a visa or passport. The AP multiplied the number of investors, excluding family members, by the minimum investment level for each year, in each program for the last decade. In some cases, the AP estimated the number of investors with the help of government data or experts on investment migration.  

The figures below are an undercount because some investors put in more than what’s required. Investment amounts for each year were converted to U.S. dollars based on the average exchange rate that year. The figures have not been adjusted for inflation.

— $7.7 billion: estimated minimum investment in the United States through the EB-5 program.

— $6 billion: estimated minimum investment in Australia through its Significant Investor Visa program.

— $4.3 billion: estimated minimum investment in Canada, including Quebec, through its immigrant investor programs.

— $1.96 billion: estimated minimum investment in the United Kingdom through its Tier 1 investor program.

— $1.71 billion: estimated minimum investment in New Zealand through its investor and entrepreneur programs.
…

In a move that is likely to give a boost to China’s Belt and Road Forum, the United States has announced that it will participate in meetings on the initiative beginning this weekend in Beijing.

The decision to attend is part of a 100-day plan and new deal between Washington and Beijing that was initially hammered out when President Donald Trump and China’s President Xi Jinping met early last month in Florida.

The interagency delegation from Washington will be led by Matthew Pottinger, a top adviser to the Trump administration and National Security Council senior director for East Asia. China is pleased with the decision.

“We welcome all countries to attend. And we welcome the United States’ attendance as the world’s largest economy in the relevant activities of the Belt and Road initiative,” said Vice Finance Minister Zhu Guangyao.

Fact and fiction

China has long been playing up the global benefits of its ambitious trade project, but analysts note that the plan is opaque and vague. Besides, the economic benefits for developed nations such as the United States are still unclear.

For many, the project still seems largely China-centric. It boasts six economic corridors, all of which are to enhance links with China through connectivity and trade infrastructure. Those include connections between China and Europe, the Middle East, Africa and Asia.

“It’s about making China great again — in Trumpian terms — and making China great on the international stage,” said Tom Miller, author of China’s Asian Dream: Empire Building Along the New Silk Road.

Domestically, China’s leaders present the project as part of their attempt at the grand rejuvenation of the Chinese people. Internationally, Beijing is trying to convince the world that it is a cooperative win-win plan that will equally benefit all participants.

So far the response has been mixed, but Beijing hopes that its forum on Sunday and Monday, which will include heads of state from 29 countries and official delegations from several other countries, will bring more clarity.

For starters, there is no official map of the grand plan, and the scope of the project continues to balloon. Beijing is entirely in the driver’s seat and the direction of the initiative is fuzzy at best, analysts said.

“What actually gets built will depend on what deals Chinese companies make with other countries abroad or on the deals that Chinese government makes with other governments abroad, and no one knows exactly what those are going to be,” Miller said.

Bumps on China road

There are also the geopolitical implications of the project.

Many developing countries along the route will obviously welcome and be eager and open to receive Chinese investment, infrastructure and development, said Paul Haenle, director of the Beijing-based Tsinghua-Carnegie Center for Global Policy.

In addition to communicating with developing countries, China needs to proactively engage with developed nations such as the United States and others as well.

China “should explain fully what the objectives are for the initiatives,” Hanele says. “And if it doesn’t do a very good job, I think then China risks these nations projecting their worst fears onto the Belt and Road initiative.”

While China-backed infrastructure projects could bring many benefits to developing countries, they could also make them reliant on Beijing’s largesse.

“The more power that China gains economically, [the more] it will have a geopolitical impact,” Miller said. “And in that sense, you can say that it does equate to a double win for China.”

Critical eye

Having developed countries such as the United States, Germany and Britain participate in the meeting could help make it more transparent.

Other developed European countries and the United States are right to look at Chinese behavior that is opaque and poorly defined with a critical eye, Haenle said.

He added Washington’s decision to attend and not shun the gathering, as it did during China’s formation of the Asian Infrastructure Investment Bank (AIIB) two years ago, is a better approach.

The United States would do well “to ask about what the rules will be and what the purpose is behind this, but at the end of the day, the U.S. should not have a hostile attitude,” Haenle said.

Friday’s last-minute announcement has raised questions about whether the United States may reverse former President Barack Obama’s decision to stay away from the AIIB and join. The bank is hosting a special press conference on Saturday to announce new members.
…

Like thousands of other small-business entrepreneurs in India, Charanjit Yadav saw his sales of generator sets and batteries plummet in the weeks after the government’s surprising move to scrap 86 percent of the country’s currency last November.

Six months on, as business booms, Yadav only recalls the currency ban when he looks at the crisp new notes that have replaced the old ones. “Everything is back to normal. It is absolutely OK for my work,” he said, glancing at the orders placed on another busy day.

But less than a kilometer from the bustling market where his shop is located in the business hub of Gurugram, near New Delhi, the massive cash crunch that India faced for more than two months has left its mark.

Braving sizzling summer temperatures of 44 degrees C (111 degrees F), a group of construction laborers had waited since dawn at a junction where contractors normally come to hire daily wage workers.

Fewer opportunities

Dhani Ram left for his village in January after work dwindled as cash shortages stopped many real estate projects. He returned a month ago, hoping that finding work would be easier. That has not happened.

“I hardly get work for 15 days in a month,” he said. “Earlier, I used to get work for about 25 days a month.”

Unable to eke out a living from his tiny farm in Uttar Pradesh state, Gajinder Singh and 11 others in his village came to the city with a contractor who promised them work. But after four days, he had not been placed anywhere.

“I sleep at night under the rail station, I don’t know what to do,” he said in despair.

Six months after India’s fast-growing economy was disrupted by the radical currency ban, growth is back on track in most sectors and stock markets are surging. But many poor people still scramble to find work as the country’s vast informal sector continues to struggle.  

Growth last year is estimated to have been around 7 percent — less than the 7.9 percent recorded in the previous year, but not as severely dented as many economists had feared. Indian officials say these numbers give the lie to grim warnings that the drastic move, meant to flush out untaxed money, would put a grinding brake on the economy.   

“It was clearly not doomsday. Looks like it was a blip, a banknote blip,” said chief economist D.K. Joshi at Crisil research and consultancy in Mumbai.

Auto sales jump

Many indicators support that. Automobile sales have jumped in recent months as serpentine lines outside banks to exchange old notes vanished. Automakers have lined up new launches as shoppers again open their purses.

Projections that the economy is poised for stronger growth has led stock markets to hit a record high in the past week. The rally has drawn tens of thousands of new middle-class investors into the market amid optimism that growth is rebounding.

Economists say most sectors of the economy are back to normal except those that depend heavily on cash transactions, such as real estate.

N.R. Bhanumurthy at the National Institute of Public Finance and Policy in New Delhi said it would take more time to assess the full impact of the currency ban on the economy. But he said he was optimistic it did not erode confidence as was widely feared.

He pointed to India’s strengthening currency — the rupee is at a nearly two-year high and has gained about 5 percent against the dollar in recent months.

“While other currencies in the world are depreciating because of the strengthening of the U.S. dollar, ours is the only major currency that is appreciating. So that shows that the foreign investor seems to be betting heavily on the Indian growth story,” he said.

‘Devastating’ for many

However, while it is largely business as usual for the middle class and formal sectors, economists say the impact on tens of millions of people who depend on the informal sector — hawkers, vegetable sellers and laborers in cities and small farmers in remote villages — has been much harder. India’s informal sector accounts for 40 percent of gross domestic product but employs as much as 75 percent of the country’s workforce.

Calling the move “devastating” for the informal sector, economist Kaushik Basu wrote this week in the Indian Express newspaper that “the brunt of the pain of demonetization has been shouldered by the poor and the lower middle class.”

While the full impact on them may not yet have been reflected in statistics, the mood of despondency among those waiting for work in Gurugram gave support to such assessments.
…

Apple says it will give $200 million to Corning Inc. so it can invest in a Kentucky plant that makes glass screens for iPhones and iPads.

The California-based company says the money will come from its Advanced Manufacturing Fund. It has pledged to spend $1 billion on US-based companies to create “innovative production and highly skilled jobs.”

Corning has had a facility in Harrodsburg for 65 years. The company has collaborated with Apple for the past 10 years by making scratch-resistant Gorilla Glass for Apple’s products. The companies say their partnership has sustained 1,000 jobs, including 400 in Harrodsburg.

Apple Chief Operating Officer Jeff Williams, Corning CEO Wendell Weeks, and U.S. Sen. Mitch McConnell are scheduled to formally announce the spending during a 2 p.m. news conference in Harrodsburg.
…

U.S. consumers bought more cars and hardware, and stepped up online purchases in April, after two months of sluggish sales.

Friday’s report from the Commerce Department says retail sales rose four-tenths of a percentage point in April, and sales were a bit better than first reported the previous month.

The data show even stronger growth for online retailers, while sales at traditional “bricks and mortar” stores sagged half a percentage point.

Investors and economists watch retail sales closely because consumer demand drives more than two-thirds of economic activity in the United States, which is the world’s largest economy.

A separate study by the Labor Department shows U.S. inflation rose 2.2 percent in the year ending in April, with a gain of two-tenths of a percent for the month. Some analysts say that makes it likely that the U.S. central bank will raise interest rates slightly at their next scheduled meeting in June.

The Federal Reserve is supposed to promote stable prices and full employment. When inflation threatens to rise a modest level, they may raise interest rates to cool economic activity and keep prices from rising so fast they disrupt economic growth.
…