According to a recent article in the South China Morning Post, half of China’s millionaires plan to leave the country in the next five years:
Reasons to leave included educational and employment opportunities for children overseas (78 per cent), preferable economic climate and greater security (73 per cent), and health care and social services (18 per cent). “The wealthy have a choice of going anywhere in the world and they go where they can get professional services, and access to everything from property through to arts and entertainment,” said James Faulconbridge, an expert on globalisation and mobility at Lancaster University in England.
Meanwhile, something very significant in U.S. immigration has happened that will impact this trend. In fact, it will affect thousands of investors from around the world – but particularly Chinese investors – who want to immigrate to North America. It has to do with the U.S. State Department Visa Bulletin and a recent Canadian provincial government announcement.
U.S. Visa Bulletin
I’ve talked about the U.S. Visa Bulletin before. Each year, Congress sets a worldwide quota on the number of immigrants it will allow to come into the United States. A sub-quota is then set for each country and further sub-quotas are set for each category of immigrant. For example, of the one million total U.S. immigrants allowed last year, China was allocated about 70,000 employment spots. That employment allocation was then broken down by five preference categories titled EB-1 through EB-5. These established how soon an applicant in that employment category from China would be accepted into the United States.
On August 23rd, 2014 the U.S. Citizenship and Immigration Service (USCIS) announced that the EB-5 preference category had become “unavailable” for Chinese applicants. This development is significant because the visa numbers for China had reached their limit for the first time in the over 20-year history of the EB-5 investor immigration program.
Immigration Retrogression For Chinese Investors
I believe this announcement is a precursor to an upcoming 2015 retrogression for Chinese investors. In the last three years, the number of EB-5 applications from Chinese investors has exploded and reached the ceiling. Thus, this announcement from USCIS. I’m betting that the freeze on EB-5 applications available to Chinese investors will soon be accompanied by lengthy delays in visas already in the pipeline.
If you’re thinking that China is being picked on for political or cultural reasons, consider the origins of another U.S. immigrant program – the U.S. green card diversity lottery.
The Diversity Green Card Lottery
In the 1980s, a trend was noted regarding U.S. immigration statistics. Immigrants from countries like China, India, the Philippines and Mexico were flooding into the United States. Meanwhile, there was hardly any immigration from other parts of the world. Concern over this imbalance created a new green card lottery under the Immigration Act of 1990. This was to benefit people from those countries that were sending the fewest number of immigrants to the U.S.
As the winners of this lottery are selected through a random drawing, the program is popularly known as the diversity green card lottery. Through its very existence, the program attests to the policy of the U.S. government to ensure that the stream of newcomers to America is a diversified one. This policy permeates all the immigrant programs of the United States.
In looking at the statistics of the EB-5 program, the number of Chinese investors coming to the U.S. has been dramatically escalating to the point where fully 80% of all the EB-5 investors in the last two years have come from China. This trend could not continue unabated forever.
A Shift In Canadian Immigration Policy
A similar policy shift was recently announced in Canada. Under the only current investor immigration program there, the province of Quebec announced a limit of 1200 investors from China. Clearly, the predominating trend of Chinese investors noted in the United States was also noted in Canada. It is being dealt with in the same way: limiting available applications.
While these announcements may be disappointing to investors who were born in China and are interested in immigrating to North America, there are some positive aspects to the changes. For one thing, even if they may not qualify by virtue of their birth in China, perhaps their spouse may qualify them if that spouse was born elsewhere – even in Hong Kong, Macau, or Taiwan – since place of birth can be shifted to the spouse’s country of birth under the program.
A Change In The Next Big Source Of Investors
While retrogression does not prevent the investor from investing, nor from applying under the program, it will delay arrival times. Issues of children growing too old for dependency, as well as a lengthening of the qualifying period for investment, will become a concern. These issues and others will need to be sorted out by USCIS.
As for investors from outside China, these developments may be most welcome. They make it more possible for them to apply and gain approvals. Therefore, unless current policies in the U.S. and Canada are changed - and despite the growing urgency of Chinese investors to exit China - you should expect a future source of investors to shift from China to elsewhere.
Andy J. Semotiuk is a U.S. and Canadian immigration lawyer with offices in Toronto and Los Angeles. He is a published author and a former UN correspondent. Learn more at My Work Visa.