Introduction

Introduction

2017/01/06 7:16am

Recently, Boston Consulting Group released a report in Beijing entitled, "The new generation driving force for China's consumer economy." According to the report, China's emerging affluent Chinese consumers will be the key force to promote the growth of consumer market in the next decade.

 

The report also indicated that by 2020, this group is expected to reach a population of 280 million, accounting for 35% of China's urban population, and 20% of China's total population.

 

THIS GROUP OF CONSUMERS HAS A PURCHASING POWER OF US$3.1 TRILLION, ACCOUNTING FOR 5% OF TOTAL GLOBAL CONSUMPTION.

 

Despite the economic slowdown, it is still expected that China will surpass Japan in the next three years to become the world's second largest consumer market. Half of the growth will come from the current affluent consumers.

 

The report said China's affluent population has reached 120 million, and its annual purchasing power has reached US$ 590 billion already. China has 50 million affluent consumers. That is more than the total of affluent consumers in India (7 million), Brazil (26 million), and Russia (10 million) combined. It is estimated the annual purchasing power of this consumer group in China will increase five-fold and reach US$ 3.1 trillion. This group’s consumption will be almost the same as the Japanese total spending, 28% more than total spending in Germany, and three times of the total consumption in South Korea by 2020.

 

Statistics from the Famous Hurun Rich List

 

· In 2010, there were over 875,000 people with assets over $10 million.

· In 2011, there were over 960,000 people with assets over $10 million.

· In 2012, there were over 1.02 million people with assets over $10 million.

 

The United States EB-5 Investment Opportunity According To Wikipedia

 

“The EB-5 visa for Immigrant Investors is a United States visa created by the Immigration Act of 1990. This visa provides a method of obtaining a green card for foreign nationals who invest money in the United States. Tomobtain the visa, individuals must invest $1,000,000 (or at least $500,000 in a "Targeted Employment Area" - high unemployment or rural area), creating or preserving at least 10 jobs for U.S. workers excluding the investor and their immediate family. Initially, under the first EB-5 program, the foreign investor was required to create an entirely new commercial enterprise; however, under the Pilot Program investments can be made directly in a job generating commercial enterprise (new, or existing - "Troubled Business"), or into a "Regional Center" - a 3rd party-managed investment vehicle (private or public), which assumes the responsibility of creating the requisite jobs. Regional Centers may charge an administration fee for managing the investor's investment.

 

If the foreign national investor's petition is approved, the investor and their dependents will be granted conditional permanent residence valid for two years. Within the 90-day period before the conditional permanent residence expires, the investor must submit evidence documenting that the full required investment has been made and that 10 jobs have been maintained, or 10 jobs have been created or will be created within a reasonable time period.

 

In 1992, Congress created a temporary pilot program designed to stimulate economic activity and job growth, while allowing eligible aliens the opportunity to become lawful permanent residents. Under this pilot program, foreign nationals may invest in a pre-approved Regional Center, or "economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment". Investments within a Regional Center provide foreign nationals the added benefit of allowing them to count jobs created both directly and indirectly for purposes of meeting 10 job creation requirement.

 

Foreign investors' use of the EB-5 program has been far less than originally anticipated by Congress. In 2005, a Government Accountability Office report found that investors were not utilizing the program because of “an onerous application process; lengthy adjudication periods; and the suspension of processing on over 900 EB-5 cases - some of which date to 1995 -precipitated by a change in USCIS’s interpretation of regulations regarding

financial qualifications.” However, in 2011, USCIS began making a number of

changes to the program in hopes of increasing the number of applicants. By

the end of the 2011 fiscal year, more than 3,800 EB-5 applications had been

filed, compared to fewer than 800 applications in 2007.”

So EB-5 is not a new concept, but it has been a hot topic in the immigration

and investment circles in the past couple of years.

Wealthy Chinese Are Everywhere

For example, Erdos, Inner Mongolia, has a total population of only 1.5 million

and only 350,000 are located in urban areas. According to a web article,

there are 7,000 people with assets exceeded 100 million Yuan ($17 million).

There are at least 100,000 people with assets over $10 million. Last year,

China’s most expensive Bugatti Veyron was sold here. The owner has paid

38 million Yuan (US$6.3 million) for that car. Erdos has over 5,000 Land

Rovers, compared with the 2,000 taxies operating in the city.

Relying on four kinds of resources – wool, coal, rare earth, and natural gas –

they have become rich like the Saudis. In Ordos, the major source of wealth

comes from coal mining. Based on nearly 500 million tons of coal mined each

year, Erdos has accumulated 225 billion Yuan ($34 billion) in new wealth

each year directly from coal mining.

In 2004, Erdos began a large land merger movement that has turned some

farmers and herdsmen into instant millionaires. Currently, one in every three

households own a car in Ordos, which is far greater than the country’s

average. This number in Shanghai is one in every five.

What Are The Wealthy Chinese Looking For?

Each family has a different priority, but most of the following fit into each

one’s thinking.

· A better health care system

· A cleaner environment

· A better education

· A greater sense of security

· Capitalism

How to Find Chinese Investors, Agents & Clients For Your EB-5 Projects & Services

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· More freedom

· Permanent residency

· American citizenship

· A better future for the family

They believe that they can find any or all of this in the USA. The EB-5 program

opens the doors for many of them to achieve their dreams. This book was

created to help you to understand the opportunity and to develop your own

strategy to bring these investors to America.

Oliver Haiqing Hua

Market Researcher & Business Analys