Category: U.S. – China Relations

The Canadian Immigration Investment Program is CLOSED; U.S. Open for Business

There will soon be a boom in the U.S. immigrant investment program as the Ottawa government made a surprise announcement to close their immigrant investment program.

My take on this was published in China US Focus, or you can read about it below:

Canada Closes Its Doors for Immigrant Investors: A Boon For America?

In a move that took almost everyone by surprise, last Wednesday, the Ottawa government declared that it would be closing its immigrant investment program for good. This comes after almost two years of a complete standstill in the program, with no visas being issued to any applicants since before 2012. That gridlock led to a backlog of over 65,000 immigrant investor applications, some dating back to as early as 2008.

Since the program was halted in 2012, Ottawa had maintained that the program would be opened again sometime in 2014. However, it appears that the pressure to close the program proved to be too great. Unfortunately, for those that have been waiting in line, in some cases for perhaps four years or more, there will be no Canadian Permanent Residency waiting at the end of this road.

It is no surprise that the biggest demographic impacted by this bombshell decision is Chinese investors. According to official numbers from the Canadian government, around 45,000 applicants waiting in line were from Mainland China.

One Door Closes, Another Opens 

As we speak, Chinese applicants and the hundreds of immigration agencies all over the country are going over options. In an industry that is far from transparent, Chinese investors that were counting on the program to be reopened are now wondering what direction to go in. Whether they were interested in living in Canada, starting a business, or in most cases, sending their child to school, their plans that had been many years in the making will have to be altered.

Just south of Canada, though, there is another country with its own investor immigration program that looks like the most natural choice for recently rejected would-be Canadian immigrants. The U.S. EB5 program boasts all of the benefits of the Canadian program, and over the next few months we may witness one of the biggest moments in the program’s history. 

Canadian Program Basics 

The Canadian and U.S. program differed in a variety of ways, both having merits and shortcomings in comparison to one another. From the mid-90s up until mid-2011, Canada dominated the market. The program had been a $400,000 loan to the federal government, which was returned to the investor without interest five years after making the investment. In 2011, the program was raised to a minimum $800,000 investment in an attempt to slow things down; applications still poured in which led to the 2012 halt and today’s outright cancellation.

One of the biggest advantages in the market was that the Canadian program was a no-risk loan to the government, unlike the U.S.’s $500,000 at-risk investment scheme. In a country where trust is scarce, many Chinese flocked to the Canadian program simply because they knew that as long as they could wait in line, the government would guarantee their green card and their money. 

The U.S. EB5 Program: A Life Preserver for Clients Rejected by Canada

Since the stall of the Canadian program in 2012, the U.S. EB5 program has started to pick up more and more steam in the Chinese market. In 2011, 2530 EB5 visas were issued to Chinese clients, just shy of 80% of the worldwide market. In 2013, that number was already up to 6895 visas, taking up 81% of the market. That number will likely rise this year in response to the drastic change in Canada.

Agents across China that had previously made their bread and butter from processing clients into the Canadian program had started to shift their business models towards including U.S. programs on their docket, and now that trend will almost certainly go forward at a harder pace.

In many ways, the U.S. program is an easier and more attractive option for Chinese clients. Although the investment is required to be “at-risk,” it is cheaper in price: $500,000 into a venture that creates 10 jobs, as opposed to the Canadian scheme of investing $800,000 to the government. Plus, the wait times are much more reasonable. The U.S. program is averaging between 15 and 21 months, whereas at best, clients looking to the Canadian market could have expected at least a two to three year wait, if not more.

What to watch for in the EB5 program? 

Many clients will be considering the U.S. program in depth for the first time. One of the most frequent questions I have received in the last few days is “Could the same thing happen in the United States as in Canada?” While there is no guarantee, it seems extremely unlikely that the U.S. EB5 program would suffer the same fate as the Canadian program. The investments, for starters, are very different functionally. As a condition of the visa, the U.S. $500,000 investment must create at least 10 jobs, which is a direct link to actual economic development. The Canadian counterpart was only indirectly tied to economic growth and job creation.

The EB5 program, most recently renewed in 2012, was actually one of the few things Congress has agreed to at all in the last few years. It was passed unanimously in the Senate and breezed through the House with only 3 dissenting votes. I doubt in an election year, any politician will risk his or her political future on taking a crack at eliminating EB5.

Indeed, what may be more important for clients now considering focusing their aim on the United States is choosing a good American partner for the investment. The Regional Center that our company operates in, the Metropolitan Milwaukee Association of Commerce Regional Center was approved in 2007. At the time, it was the 21st regional center in America. Today, there are over 400! Competition is fierce, and most in the business are newcomers. Now is the time for clients and their agents to analyze projects closely and go with the companies that are committed to building quality, long-term, safe projects.

I believe that for whatever reasons the Canadian government decided to close its program, this is a huge opportunity for America. Communities around the U.S. that are most friendly and welcoming to our Chinese friends and other international friends, and have ready U.S. projects to boot, and will gain the most.

Dan Redford is the Director of China Operations for FirstPathway Partners, and industry leading EB5 immigration fund manager. He also serves as the President of the Michigan State University Beijing Alumni Club. You can follow him and his perspectives from China athttp://www.danredford.com.

“China Dan” – By Tom Watkins

I’m flattered by a recent article posted in Dome Magazine by Tom Watkins highlighting my China journey. The article is called China Dan, and you can read the article on Dome here or read the whole text below.

Truthfully, my global journey has been an amazing experience, but its a road that I do believe will lead me back to the Mitten state someday!

China Dan

by Tom Watkins

There is much angst about the brain drain in Michigan. You’ve heard it: Our young college grads securing education, knowledge, skills and talent only to flee the state after graduation.

Yet it is a big world out there, and Michigan has two beautiful peninsulas — we are not an island.

Perhaps Michigan will benefit from the worldly experiences our youth gain elsewhere, if the magnetic pull of Pure Michigan can draw them back someday.

I met one such young man, Dan Redford, in his senior year at Michigan State University. He flew the coop and now makes his home in Beijing, China. Dan is fluent in Chinese and bleeds “Green” as a proud MSU grad.

Redford earned a bachelor’s degree with a double major in Chinese and international relations from James Madison College at MSU.

Redford, now 25, originally wanted to get a political science degree and attend law school. That all changed after his first trip to China in 2008.

Why China? He first fell in love with the language, and after his Middle Kingdom trip in 2008, taking in the sights, sounds, culture, language and people, he was hooked. The added excitement of the 2008 Olympics pulled him into the China orbit.

Redford grew up in Frankenmuth, a town of 4,000 people – in stark contrast to Beijing’s nearly 20 million people. As he says, “There are nearly as many people in my Chinese apartment building as there are in the entire city of Frankenmuth”.

Living in the Chinese capital, Redford feels like he is at the center of the most dynamic, unfolding story of the modern world. He clearly is, as China is the fastest growing large world economy, bursting with possibilities. Going forward, all major world geopolitical issues will intersect at Beijing and Washington, D.C.

Redford is director of China operations for First Pathway Partners of Milwaukee, promoting this Midwest state in China. Yet, he is a Michigan cheerleader, as well as one for Wisconsin, and a one-man marketing crew promoting the Mitten State with his unbound enthusiasm.

Does he miss Michigan? Of course. He would like nothing better than to mesh his love for Michigan and love for all things China. His life ambition is to “make a lasting impression on everyone I meet, and meet as many people as possible before I’m done.”

Redford credits his time at MSU with helping to open his eyes to the world. His first trip to China was through a study abroad program. MSU taught him to “think globally”.

Redford appreciates Governor Rick Snyder’s efforts to make Michigan a friendly place for immigrants and to build bridges.

“Governor Snyder is taking risks to propel Michigan forward past denial and to thrive on the global stage,” he says.

When asked what advice he would offer high school kids, he responds, “Find something to be passionate about and let God be your compass. Let your passions drive you forward.”

Sound advice from a young man who has circled the globe.

Yes, Michigan has lost Redford for now.

At some point in the future, he will return to Michigan and our state will get its ROI — return on investment — from his global experience and perspective.

Imported From China – An MSU Documentary

As it is every day, it is GREAT to be a SPARTAN.

I am so proud of my friend, colleague, and professor, Dr. Geri Zeldes of Michigan State University for producing and directing a great documentary about the experience of Chinese students at MSU, Imported from China. The documentary featured the journey of a few Chinese students at MSU, along with American students that reflect on their interactions with the influx of Chinese in our community. It premiered at MSU on September 17th, and will soon be distributed widely. I believe it will be a great tool for any university or school that is experiencing an influx of Chinese students and is looking to serve them better.

I am honored to have been interviewed and included in the documentary, along with some of my other respected and dear friends, including Jing Cui, Tom Watkins, Peter Briggs, and Joy Fu.

MSU is currently home to over 3,600 Chinese students. This puts our university at the heart and center of one of the world’s most dynamic and unfolding stories – the one between China and the U.S. As the documentary says, “Like it or Not, we are linked together.” At MSU, we are creating leaders of a generation that I believe will guide us through a prosperous and fulfilling modern U.S. – China relationship.

 

If you are interested in screening this video at your school or for your alumni club, please contact me and I can put you in touch with Geri.

 

Taking on Sinophobia Through Education – USA China Daily

I was privileged to have been introduced to the potential for U.S. – China relations while a student at Michigan State University. However, I’m well aware that across the United States, many remain skeptical and frankly, uneducated about what is going on in China.

Michael Barris of the USA China Daily wrote a great piece about this issue, quoting me alongside my long time friend and colleague, Tom Watkins. You can read the original here or see the text below:

 

In the midst of the chatter over China’s trade data report Thursday, there it was: Sinophobia.

“For better or worse, China has become the new linchpin of the global economy,” Investing Daily.com analyst Benjamin Shepherd wrote. Summing up the trade numbers, he said: “The old saw used to be that as goes the US, so goes the rest of the world. With China poised to become the world’s largest economy sometime in the next decade, that US-centric preconception will have to be revised.”

Shepherd’s characterization of China’s economic power as a “better or worse” proposition brings to mind Stephen Schwarzman’s comments to a New Yorker magazine reporter this spring, when the chairman and CEO of the private-equity firm Blackstone Group discussed the “hard-core, real anger” that exists toward China in the United States – sentiments that sparked his decision to launch a $300 million college scholarship for study, not here, but in China. Schwarzman, the New Yorker reported, was “hoping that familiarity with the world’s rising superpower” would “blunt growing American anxiety about changes in status.”

Schwarzman, the magazine said, first started thinking about offering the scholarship fund in 2010 when the juxtaposition of the US’ economic calamity and China’s then 9 percent annual growth rate stirred “negative attitudes” in the West toward China. “I was convinced that would create frustration in the West, and frustration would lead to anger,” Schwarzman was quoted as saying, “and that anger can lead to trade problems, and ultimately to military confrontation.”

At a certain point, he said, “it seemed logical” that “really bad things” would begin to occur. “We had to find a way to stop or ameliorate that situation.”

By establishing the scholarship fund, Schwarzman said he aimed to produce individuals who would understand China.

An effort is underway to teach the US about China. In 2006, a survey by the Modern Language Association – the organization for scholars of language and literature – showed that some 51,600 students at roughly 2,800 US institutions of higher learning were studying Mandarin – a 51 percent jump in comparison with a similar study four years earlier. The enrolment jump, MLA said, was mainly due to China’s increasing prominence on the world economic stage. For the record: Chinese is the most spoken language in the world, and more people speak English in China than speak it in the US.

But deeper obstacles can get in the way of attempts to change deep-seated attitudes about China. That’s the view of Tom Watkins, the former Michigan state schools superintendent and frequent China visitor, who has advocated stronger US-China ties for three decades.

“The biggest challenge is convincing people that the world has changed in profound and fundamental ways,” Watkins said in an interview. “We are living in a fast-paced, disruptive, transformational, technologically-driven, global, knowledge economy where ideas and jobs can and do move around the world instantaneously.”

In the years to come, Watkins said, “China, its history, culture and language will be front and center in all world decisions. The individual, city, region, state and nation that adapts to this new reality will prosper as the 21st century unfolds – others will fade from the scene.”

Another view of the issue comes from Dan Redford, the Beijing-based director of China operations for Wisconsin fund management company FirstPathway Partners. Redford said the biggest challenge in teaching Americans about China is “distance, both cultural and physical.”

“Because China is so far away, it is difficult to deliver that experience to most Americans,” he said. “So, our country will have to rely on individuals who have gone out of their way to get that experience to provide expertise and guidance on China.” He said there are “relatively few true China experts who understand China’s rise and how it has grown as a nation.”

Redford recalls being in a meeting with a local official in Michigan who claimed “he’d rather go to India on a trade mission than China because he preferred to deal with democracies, not communists”.

“That is so narrow minded and inaccurate,” he said. “I think that our education system has failed to produce effective leaders in government that can change the rhetoric and the narrative on the conversation with China.”

Unlike the analyst who saw China’s rise as a “for-better-or-worse” proposition, Redford believes the US will help its own cause by educating citizens about the changing of the guard that is well underway.

“It is widely accepted that China will have a bigger economy than the United States within the next 20 years…and perhaps sooner,” Redford remarked. “Enough said.”

Contact the writer at michaelbarris@chinadailyusa.com

 

 

The Six-Step Approach For China to Help Rebuild Detroit

Detroit’s announcement of chapter 9 bankruptcy was a difficult but essential step for the city’s resurgence. Now, more than ever, what Detroit needs is belief. Detroiters have to believe that the city will come back; and if new people are going to be attracted to become residents, they’ll have to believe that Detroit is safe, exciting, and profitable.

This type of belief only comes from raising and executing bold ideas. Here’s one: invite China to be a key partner in the revitalization of Detroit. What better statement could be made than to have a city like Detroit, for years mired by resentment of a China that is “stealing our jobs,” finally grow up to strategically engage the world’s second largest economy?

The Washington Post recently published an article outlining six crazy ideas for rebuilding Detroit, so I thought I’d add a twist to that. Below, I propose a six-pronged approach to building the “China Engagement Strategy to Help Rebuild Detroit.” It is a long-term vision, which needs to start with getting people face-to-face, building trust, and ultimately result in real investment and jobs coming into Detroit from this unlikely partner.

1. Pure Michigan in Chinese

Unsurprisingly, Chinese people largely associate the city with the blight, unemployment, and violence that they see on TV. The only way to bring in investment is to get actual people into the city. Investing in a “Pure Michigan in Chinese campaign” will allow Michigan and Detroit to cash in on the growing number of Chinese tourists using their expendable cash to tour America and hopefully change their perception through a direct exchange.

2. Build a strong Sister City Relationship between Detroit and Chongqing

People-to-people exchange needs to increase to build trust. A great platform for this would be bolstering the Sister City relationship between Detroit and Chongqing, which happens to be one of the world’s fastest growing cities

Governor Snyder seems to be ahead of the game on this one as he is planning a stop in Chongqing on his upcoming trade mission. May I suggest he kindly ask Chongqing to write a check to fund a vibrant sister cities program with Detroit?

3. Engage Chinese students in Michigan

Between the University of Michigan and Michigan State University alone there are currently over 5,700 Chinese students going to school in Michigan. While they are pumping in millions of dollars in revenue to the state every year through tuition and fees, that just tips the iceberg. Most of these students would be dying to get job experience during their time in Michigan, even if that required living in Detroit for the summer. These students have the power to change the narrative.

4. Get the EB5 program working in Detroit

Developers around the country have been using the EB5 immigration investment program since 1992 to fund job-creating businesses. Though there are six approved regional centers in Michigan, all with jurisdiction in Detroit, so far, there has not been a successful EB5 case in Detroit, or even in the state of Michigan for that matter. In 2012, over 80% of the visas issued to foreigners thru this program came from China.

5. Detroit Real Estate purchases

Recently, the United States National Association of Realtors noted that Detroit cracked the top 5 most asked about real estate markets from Chinese buyers. Why not use the attention the city is getting now to promote the great properties that already exist? The bankruptcy could indicate to some that now would be the time to buy when prices are at rock bottom in anticipation of a climb.

6. Court China to buy Detroit ‘s assets and invest in companies

China’s government is in a position to make outward investment. They have the world’s largest stockpile of foreign currency reserves, now standing at over $3.44 trillion. China is in the midst of deciding whether or not maintaining such a high number of reserves is literally getting the most bang for its buck, and is making a pivot to make overseas purchases and investments.

What might Detroit have that would be interesting to the Chinese? Of course, as an industrial and manufacturing hub, Detroit has access to infrastructure and technology patents that have continued to grow the presence of Chinese automakers in Detroit. Huge parcels of land are also available at rock bottom prices that are ripe for business development.

If we really believe that Detroit can rise up from rock bottom, it is going to take a few bold ideas like these to make this city tick again. Consider me a believer!

Vice Premier Wang Yang delights the crowd at the U.S. – China Strategic Economic Dialogue

Over the years, the reputation of Chinese officials for being droll, dull, and boring in the public sphere has grown to almost legendary proportions. China’s last President, Hu Jintao, was famous for constantly boasting a somber, expressionless face no matter what occasion, a trend that new President Xi Jinping is hoped to reverse. (And sometimes, when the Chinese get animated it goes badly…as President Jiang Zemin experienced in his interview with the Hong Kong press in 1994: http://www.youtube.com/watch?v=3cmjaptnr6k).

So when Vice Premier Wang Yang addressed the crowd at the U.S. – China Strategic Economic Dialogue yesterday carrying an outgoing personality and speaking in well-executed sarcasm, it came as a refreshing surprise. As cited in this Reuters article, the Vice Premier said that the U.S. and China relationship is like a marriage, though joking that it should not be confused as a “gay marriage,” making light of the current U.S. political discussion on the topic. He even went on to snide about how we should not be confusing the divorce of Rupert Murdoch and his Chinese wife with having any effect on the relationship of the two countries.

Wang’s delightful personality and sense of humor adds flavor to the U.S. – China relationship, and could serve as an intangible element to progress relations that has largely been missing over the past 4 decades. Humor and whit have become staples in American politics and the Vice Premier’s commentary and attitude have already been welcomed by the U.S. diplomats at the conference.

His comments are not just catching the attention of the U.S. side. The video posted of his talk on China’s 163.com elicited almost 5000 responses from Chinese citizens, mostly voicing their support of Wang Ying and his efforts to bring America and China closer together. Some even appreciated the humor, saying “汪洋很幽默“－Wang Yang is so funny！

Still, Wang Yang’s perspective and personality are not mainstream polity in China. He is an outspoken member of the reformist end of the Communist Party, and to be sure, his compatriots at the dialogue took a much more serious tone.

At the end of the day, it can’t hurt to have one of these funny guys involved in the high level discussions between the titans to lighten the mood and remind us all that we are all just human beings trying to make the best of this Earth that God has given us.