Three out of five wealthy Chinese want to immigrate

[Source: Jason Chow; WSJ]

China’s rich continue to want to invest and move abroad in large numbers, but their goals have begun to shift, consulting firm Bain & Company said in a report released Tuesday.

Three out of five wealthy mainland Chinese are looking to immigrate out of China while another third own investments abroad, Bain said in its “China Private Wealth Report, 2013,” based on a survey conducted earlier this year of 3,300 “high-net-worth individuals” with at least 10 million yuan (US$1.6 million) in investable assets.

Jennifer Zeng, the lead author of the report, said the desire for overseas immigration and investment is a defensive measure for China’s rich. “The more they look for risk diversification, the more they look elsewhere,” said Ms. Zeng in a phone interview from Beijing.

She pointed out that the proportion of wealthy Chinese with overseas investments has doubled to 33% since 2011, the last time the survey was completed. Among the ultra-high-net-worth Chinese – those with at least 100 million yuan of investable assets – 51% said they had money invested overseas.

Read entire article:  Three out of five Chinese want to immigrate

US Banks Pummeled by Low Rates

An article in the Wall Street Journal dated October 23, 2012 stated that due to the current “superlow” interest rates in the United States, the Banking Industry is experiencing its lowest net profit margin in three years.  

The eroded net profit margin (which tracks how much banks earn on funds borrowed from depositors which are in turn lent or invested) has caused sliding lending profits, causing banks to close branches, weigh additional fees and roll back customer favorites, such as free checking.  The average margin for the industry’s largest banks is at 3.12%, the lowest since 2Q 2009.  

Over time, these downsized profits are likely to accelerate a downsizing process that has halved the number of insured institutions over the past two decades.  The spread between banks’ deposits and lending rates has narrowed in part because of low Federal Reserve-influenced rates and decreased demand for loans amid the soft economic growth.  As their higher-yielding loans mature, banks are being forced to replace them with assets that carry much lower rates.  If interest rates begin to rise, these new loans may prove to be unprofitable. 

Higher costs for banking services could push more people out of the financial system altogether, adding to the millions of customers already considered as lacking access to affordable financial services.  

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Wall Street Journal Article - EB-5 Investor Interests

The Wall Street Journal released an article entitled "Plan B for China's Wealthy: Moving to the US, Europe" that was released on Feb 22. The story reveals how certain trends among the wealthy Chinese individuals who are looking to migrate to U.S. and European countries. The article points out that Chinese interests in EB-5 continue to grow as high valued individuals are generally unhappy with China's current social and business conditions.

 READ MORE HERE - Wall Street Journal Article

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2815 Monroe Avenue, Suite 2100
Rochester, New York 14618
Tel: (866) 763-6515

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