China expected to limit developers’ access to funds from US investor visa programme
New rules would tighten Chinese firms’ overseas capital use, according to Xu Chen, chairman of the US chapter of the China General Chamber of Commerce
China’s foreign exchange regulator will make it more difficult for property developers operating in the US to rely on a controversial investor visa programme to fund their projects, a Chinese industry association said.
Restrictions aimed at controlling how Chinese companies and individuals deploy capital overseas will make it difficult for them to invest in businesses not aligned with domestic consumer demand, such as pharmaceuticals, and prioritise industries for the government including advanced manufacturing, Xu Chen, Chairman of the US chapter of the China General Chamber of Commerce (CGCC), told reporters.
“From July, [China’s State Administration of Foreign Exchange, or SAFE] will continue to further tighten capital outflow from China and this is very important to the EB-5 program,” Xu said.
“It’s reasonable for China to tighten restrictions on the capital outflow into [the real estate] market” because Chinese investment in this sector had surged too quickly.
“In the meantime, China’s central government, central bank and also the foreign exchange control authorities are encouraging the capital outflow in the market closely related to the consumption demand in China’s market.”
Sometimes referred to as the “golden visa programme”, the HB-5 programme allows foreigners investing as little as US$500,000 in a qualifying real estate project to apply for permanent residency. Qualification for projects approved for the $500,000 minimum investment level is limited to those in areas of high unemployment.