China: World’s Largest Source of Immigrants
China was the world’s largest source of outbound immigrants in 2012, with more than 150,000 mainlanders obtaining overseas citizenship, according to the International Migration Report.
More than 87,000 emigrated to the U.S., with roughly 30,000 choosing Canada and about the same number opting for Australia.
The report, the first of its kind, was issued by the Centre for China and Globalisation, and the Beijing Institute of Technology’s law school.
Its authors pointed out that better educational opportunities for their children, as well as pollution and the political environment were among the main drivers for wealthier Chinese seeking overseas passports and residence.
A similar observation was made in a 2011 report jointly released by Bain & Company and China Merchants Bank, which said that some 80% of outbound immigrants cited better education opportunities as their top reason for emigrating.
The vast majority of the emigrants chose English-speaking countries. English language ability is closely correlated with career success in the minds of most Chinese people.
According to the South China Morning Post, “Growing Market for International Schools” (January 15, 2013), the Chinese mainland now has 338 international schools. Shanghai leads the way with 91, followed by Beijing (77), Shenzhen (16), Chengdu (15), and so on. This doesn’t count Hong Kong, which has 43 international schools, or Macau, which has several as well.
As these schools mature, they seem likely to provide a viable alternative to parents whose primary aim is to seek a more international curriculum for their children and prepare them for overseas studies at the tertiary level.
The common chatter I hear among Chinese and foreign friends in China is that apart from better education for their kids, many of these émigrés are seeking safer and more secure jurisdictions for their wealth. It’s widely assumed that some (or many) of them are corrupt officials wishing to stay “one step ahead of the sheriff,” especially as the new Chinese leadership has been talking about stepped up anti-corruption efforts.
One thing is for sure: the choice of destinations for this year’s emigrating class was not driven by a search for lower personal income tax rates.
Capital flight and brain drain are valid concerns, for different but somewhat overlapping reasons.
According to the same report, total global migration in 2010 was somewhere in the range of 214 million people, which sounds a staggeringly large number.
If this is an accurate number, then China’s outbound migration seems a drop in the bucket. On the other hand, it says something about how relatively successful people, at least as measured in economic terms, perceive the future prospects of their homeland for themselves and their offspring.
That is probably the theme most people find of concern. The year 2012 in China featured a very unusual degree of uncertainty and angst. That was true in many countries last year for economic as well as political reasons, but in China it took place with special Chinese characteristics.
By the second half of the year, I detected a high level of pessimism and cynicism among friends I spoke with in China. Naturally, concerns about air pollution and food safety were part of the mix, but the scope of their concerns was wider and deeper than health issues.
As we approach the Lunar New Year, I sense more of an upbeat and optimistic spirit among people I talk with, although a host of questions about policy directions are still waiting to be answered. To some extent that’s typical of any major leadership transition year, although this is more of a historic crossroads with regards to a whole range of important reform issues.
I don’t actually think 150,000 mainlanders obtaining foreign passports is great cause for alarm in the greater scheme of things.
To the extent that it produces a larger cohort of well-educated, globally aware young Chinese people, it’s a positive development.
With wealth comes a range of choices, and sudden wealth may be accompanied by a naïve sense that the grass is greener on the other side of the hill. In the end, it may or may not be.
One thing I know from personal experience, however: when you ask someone — Chinese or otherwise — why they obtained a foreign passport, you shouldn’t necessarily expect a completely honest answer.
Recently a wealthy American friend told me he had given up his US passport. He cited a list of his disillusionment with various US policies and developments as the main factor behind his decision.
I don’t doubt those frustrations are real, but what he didn’t mention was that the personal income tax rate associated with his new passport is less than half that of the U.S., plus he will enjoy a whole range of other lower tax rates, simpler tax policies and related benefits.
In other words, a huge long-term financial savings was an outcome of his passport-changing decision. Nothing wrong with that per se, but even in explaining that decision to a friend he chose not to mention that part of the picture.
That’s human nature, on the one hand. On the other, it also illustrates that different people view nationality, and money, in different ways.
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