Abu Dhabi, UAEMonday 14 October 2019

Green Card scheme a slam dunk in China

For the Chinese people, political reform is a burning issue Yet the response to a roadshow promoting legal US residence in return for investment spoke volumes.
More Chinese are looking to follow the example of their national hero Yao Ming and move to the US.
More Chinese are looking to follow the example of their national hero Yao Ming and move to the US.

Some were dressed in suits, some in casual and even worn-out clothing, but all of the Chinese in the banqueting hall had one thing in common - money, or access to it.

About 200 potential investors had streamed into the west Beijing hotel to hear about an opportunity in New York that seems well-calibrated to a changing world: Green Cards in return for interest-free credit.

The roadshow was showcasing the biggest-ever use of the US government's EB-5 scheme, which offers Green Cards to foreigners who invest US$500,000 (Dh1.8 million) in America for two years, thereby creating at least 10 new jobs.

Officials from the New York City Regional Centre (NYCRC) are touring China to drum up 498 investors with the aim of contributing $249m to the city's biggest property project outside Ground Zero.

The Atlantic Yards in Brooklyn incorporate a basketball stadium for the New Jersey Nets, new yards for Long Island Railroad and housing blocks.

The scheme's basketball element has been given great publicity in China, whose NBA player Yao Ming is the country's biggest sporting star.

Former basketball legends such as Otis Birdsong and Darryl "Chocolate Thunder" Dawkins attended EB-5 events and the Nets played Yao's Houston Rockets in Beijing.

Critics say reaching out to the Chinese is simply a way to save cash. If developers borrowed the same amount of money from a bank they would face tens of millions of dollars in interest repayments.

But the success of the EB-5 scheme relies on the continued attractiveness of the US despite its current economic woes and political turbulence.

Despite China's new wealth, new buildings and new confidence, some of those who have benefited most from its stellar economic performance seem keenest to emigrate.

Yao caused a stir in May when he and his wife chose to give birth to their daughter in the US instead of China, thereby ensuring she has American citizenship.

So keen are some Chinese to gain entry to America that they value the assurance of a Green Card over any financial return.

Most EB-5 schemes pay interest of between 2.5 and 2.75 per cent. But not this one, according to Gregg Hayden, the general manager of NYRC.

"The investor on this particular project, to simplify the process, is not getting paid any interest," says Mr Hayden. "We have put them in such a safe, secure position that they're not earning any interest. If you look at the spectrum of EB-5 projects, interest rates are paid according to risk."

Chinese investors are mainly interested in gaining access to the US education system for their children, Mr Hayden says.

"The Chinese family wants its children to excel," he says. "There are certain ceilings along the way, whether it be in junior high school or high school, and even college here locally, that make it difficult for them to succeed.

"There's a barrier of entry of some sort, whether it's intellectual competition, test scores or financial. Most of the investors are interested in emigrating to the US for education purposes."

But for some would-be investors, America's attractiveness is political freedom.

"It's a very interesting project," says one attendee, who did not wish to be identified. "I will have to talk it over with my relatives. The main reason is for my son to get a good education for his future. And he can grow up freely there."

Asked if he considered his son to be free in China, he replies with a smile: "I don't want to talk about this picture."

The rich man's desire for a freer life for his son and his willingness to emigrate for it reflect the seriousness with which the issue of political reform is being treated in China.

This month's Communist Party plenary session resulted in consensus that China should pursue "inclusive growth" to pull back runaway social inequality and do more to protect the environment.

But there is deep disagreement within the Communist Party over whether that should include political reform.

Within government circles, debate is raging between two camps that can be divided roughly into those advocating "universal values" versus those insisting on government with "Chinese characteristics".

Hardliners say universal values are a tool used by western imperialists to interfere in Chinese affairs, while activists dismiss Chinese characteristics as a fig leaf for authoritarian rule.

Wen Jiabao, the Chinese premier used an interview with CNN last month to state his commitment to political reform, but his remarks were censored in China.

That was followed by the Nobel Peace Prize for the jailed Chinese dissident Liu Xiaobo and an open letter from a group of retired party officials, dubbed "party elders", calling for freedom of publication and an end to "embarrassing" censorship.

Hardliners hit back last week in an editorial in the party's flagship People's Daily newspaper, which they used to dismiss multiparty democracy and separation of powers as inefficient and divisive.

At the roadshow event, I Believe I Can Fly by R Kelly and What a Wonderful World by Louis Armstrong played in the background as intrigued Chinese quizzed an American immigration lawyer and discussed the investment in groups.

Although there was nothing secret about the high-profile occasion, subsequent reports on Chinese websites blurred out the faces of attendees in photographs.

Despite the liveliness of debate in China over political reform, analysts say true change is likely to remain some way off.

In the meantime, some of those frustrated with the current political climate are voting in the only way they can - with their cash and their feet.

business@thenational.ae

Updated: October 27, 2010 04:00 AM

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