Chinese Millionaires Fleeing To United States
As the Yuan continues to slide downward towards it's worst month ever, more than a third of Chinese millionaires are looking to the United States for a stable place to live and invest their money.
These results came from a study by the Huran Research Institute, an English based Chinese research firm along with the Visas Consulting Group, an immigration advisory group. They surveyed 400 Chinese citizens with an average net worth of $4.5 million.
The rankings enlisted the top 10 countries wealthy Chinese wanted to emigrate to, which was dominated by the United States for the fourth year in a row. The U.S. "far surpasses other countries" aided by President Trump's tax cuts which "saw it score 8 points higher in the tax category this year, " said Rupert Hoogewerf, the founder of the reporting agency.
Another recent New World Wealth survey covering 91,000 Chinese millionaires living overseas finds that moving overseas is on the top of China’s wealthy wish list—with the U.S. being the most desirable destination.
After the real estate market collapse of 2008 President Obama voided the 1980 Foreign Investment in Real Property Act, known as FIRPTA, since then Chinese investors have been coming to America in droves to buy up "cheap" real estate. At the time, the Chinese real estate market was in the midst of a bubble, so many investors moved their money to the United States, aided by another new Obama law that allowed visa stays for as long as 10 years.
“To be honest, Chinese buyers have been flooding this market the past few years,” says Jim Conlan, who has been selling homes in Seattle for more than 30 years. “Some of them buy homes sight unseen, while others travel here for a kind of real estate tourism and buy real estate after only one viewing.”
For the fourth year in a row, China ranked first among foreign nationals purchasing property in the United States, according to a survey by the National Association of Realtors (NAR).
What is the main reason for this financial migration? American free markets allocate economic resources efficiently while our government creates a “general equality of condition among the people,” as explained by Alexis De Tocqueville Democracy in America.
Compared to the Chinese government, the United States protects civil liberties and economic freedoms, and takes care of the areas of the economy where free markets are inadequate. The primary factor being the protection of the public from health, traffic, occupational, and environmental hazards.
It doesn't really matter which country a person comes from, they enjoy the economic opportunities created by a free enterprise system, and the quality of life assured by a fair, transparent, and effective government.
This mix of institutions is exactly what China is missing. Not to mention the Chinese government has it's hands in every aspect of it's citizen's personal and business lives.
With this information in hand, there is one question each and every American must ask themselves. Should we have opened up our real estate market to foreign investors who will most certainly try to manipulate, inflate and bleed dry an American asset class that they have no stake in maintaining for the long term?