Just last month my family and I were on a holiday in Toronto, Canada for three weeks. Toronto is one of these places with a large international community, not in the least Chinese. During the holiday we stayed mostly at the house of my wife’s Chinese friend which four brothers and sisters are all living in Toronto. Their parents made their fortune in the textile industry in China and decided that it would be better for their children to live abroad. So they did what all Chinese parents with the necessary means would do: they bought them all a house. And as the family had business connections with Canada and had invested money there, as a way of economic emigr

ation, the location they choose was Toronto. In other ways, by investing enough money in the country, they bought their Canadian citizenship. This is a fairly common policy among immigration countries like the US, Canada, Australia and others to attract foreign capital. Married with somebody from Guangzhou and having two children now, my wife’s friend and her husband both have a job in Toronto. They live in Markham, a suburban area, a 30 minute drive from downtown Toronto.

When arriving at the airport, our friend picked us. When entering Markham, a suburb of 250.000 people, It all seemed like a typical north American neighborhood: wide lanes, typical American style housing, lawns, etc. This is what I had expected. However, the shocking part was yet to come. to our great surprise Chinese signs started to pop up everywhere. There were huge shopping malls, with only Chinese stores. Advertisements for lawyers, doctors, dentists, etc. were all done in Chinese. Everywhere I looked I saw Asian faces. When going to the local Walmart -even there were Chinese characters-, most customers were Chinese. Our friend took us straight to one of the dozen of Chinese restaurant to meet her friends. The interior looked Chinese, the staff was Chinese, and al her friends were Chinese. Cantonese was spoken everywhere. I thought our 13.5 hour flight had taken us to Toronto, however it seemed I had arrived in Guangzhou. I learned that this is the lifestyle of a lot of Chinese abroad. Some areas in Markham are populated 80% by Chinese immigrations. As a result of the capital inflow, house prices doubled which led to the fact that ‘original’ habitants sold their house and moved away to other areas. Wealthy Chinese Immigrants took their place. Markham has become another Chinese area. Not much integration in the Canadian society there, just another ‘new’ but modern Chinatown.

Lately there are a lot of stories going on about Chinese middle class moving want to move abroad in order to escape China. The idea is that they buy property abroad and move away from China. Some foreign media often interpret this phenomenon as if Chinese citizens have of a certain dissatisfaction with the Chinese government or that the economical ship is sinking. The reality however is a bit more complex than this. It’s certainly not all about migration. Although the story written down above is a clear case of Chinese moving abroad, there are also very different incentives to buy property abroad. Wealthy Chinese are looking for investments abroad now the return on investment in China is lower. Rich Chinese want to secure a portion of their money abroad, especially now some many people believe that the yuan will lose some of its value. But contrary to my wife’s friend, certainly not all Chinese citizens who transfer their money abroad or obtained a foreign passport, also move effectively abroad. Like my wife’s friend, those who emigrate do so mostly because they want to raise their children in an environment with clean air, safe food and good education. However it’s interesting to see that although the parents bought all their five children a house in Toronto, they themselves are still living in China. They would like to remain with their friends, and stay in their home country. 

A foreign passport is an interesting option, but that doesn’t mean citizens effectively emigrate. Other people prefer a foreign passport in order to enjoy other advantages, such as easier travel, better healthcare or access to better education. With a foreign passport, it is much easier to be admitted to a foreign university or international school in China, something that is extremely important to Chinese parents. Most classmates of my children who attend one of the international schools in Shanghai, are rich Chinese with a foreign passport. A lot of them have property abroad. However they still live and work in Shanghai where they have their business activities, companies, families and friends. Educational purposes is also the reason why some pregnant women travel to the United States to deliver their baby there in order to get the American citizenship. It is a kind of birth tourism. In 2014, as at least 30,000 Chinese babies were born in the United States. Chinese specialized agencies organize for $30,000 to $40,000 the whole trip, including airline tickets, lodging in the United States, Chinese-speaking doctors and all the paperwork that is involved to obtain American citizenship. Especially the state of California is a popular destination. This state has many public universities where every resident of California can follow rather cheap quality education, which is a very attractive option for many Chinese citizens.

However; the fact remains that Chinese are investing all over the world. Just two weeks ago in order to cool down the market, Vancouver decided to levy a new property tax on foreign buyers market after home prices more than doubled in the last decade. British Columbia absorbed more than $760 million of foreign housing investment in five weeks alone this summer, Sydney’s housing prices have been soaring the last decade, mostly because of Chinese investors. Same story in Los Angeles or Auckland. Chinese investment however is also creating jobs. Chinese real investment has created over 200.000 American full time jobs over the last six years, and brought in more money from individual foreign investory than any other country. Individual Chinese buyers brought in a whoppy $93 billion into the US over the last five years, not to mention Chinese corporate investment like the purchase of the Waldorf Astoria last year. However, things might change slowly as the crackdown by Chinese government on capital flight becomes more strict. According to research by the Washington Post, China is the world leader in illicit financial flows. In 2012 about $220 billion was illegally transferred out of the country.

Foreign countries still actively try to attract Chinese investment. In the luxurious shopping centers in Chinese cities I still regularly see Australian and New Zealand real estate companies actively promoting their real estate. One of the most used slogans is therefore "buy real estate in Australia, get a residence permit." Some European countries try to attract Chinese money too. In the Shanghai Daily I saw adds which encourage investors to buy property in Germany. For the price of 330,000 euros anyone could buy a house in Düren "45 kilometers from the Kölner Dom". The ad continued: "The owners of this property can apply for a German residence permit when showing the sales contract" and "enjoy free education and a clean environment in Germany". Whatever the trend will be, it’s another sign that the Chinese middle class is changing the world, instead of the world changing China.

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