Enthusiasm to migrate 'won't be dampened'
The Australian government will suspend a visa program for wealthy offshore investors from Friday until July 1 ahead of a planned revamp, a move some suspect could mean a "crackdown" on foreign investment.
Observers told the Global Times Thursday that they believe it is unlikely to dampen Chinese investors' enthusiasm for the continent.
Applications for the Significant Investor Visa (SIV) program, which stipulates that applicants should invest at least A$5 million ($3.86 million) in Australia to obtain residency, will be temporarily halted to make sure the program will offer "the best balance between investment migration and economic benefit," according to a statement on the website of Australia's Department of Immigration and Border Protection (DIBP).
"The government has been consulting extensively on the design of the new complying investment framework," Michaelia Cash, Assistant Minister for Immigration and Border Protection, was quoted as saying in The Sydney Morning Herald Wednesday.
It is predicted that foreign investors will be required to put money into venture capital and start-up companies, instead of low-risk areas such as government bonds, The Australian reported Tuesday.
"It's understandable that as the economy improves, Australia will tighten immigration policies, while lenient incentives were adopted to attract more investment regardless of how it profits the country when Australia was hit by the global financial crisis after 2007," Liu Guofu, an expert on immigration law from the Beijing Institute of Technology, told the Global Times.
In the past, Chinese investors preferred low-risk fixed-term deposits, Zhong Jian, an Australia-based representative from Aus Property Investment Group, told the Global Times on Thursday.
Zhong said that in his experience, a majority of Chinese people investing in property through the SIV program were acting illegally as direct investment in property was never allowed under the scheme.
"Such investment fails to effectively drive the local economy," a representative surnamed Zhang from Beijing-based immigration specialists Auslane Immigration Consulting Group, told the Global Times.
A spokesperson for Australia's Foreign Investment Review Board said on Tuesday that the government is considering better ways to capitalize on the money brought in by the SIV, according to The Sydney Morning Herald.
Speculation remains that the SIV suspension is aimed at cooling the real estate market as the policy adjustment coincides with the latest survey showing increasing demand from offshore buyers.
The latest residential property survey conducted by the National Australia Bank showed that foreign purchases of new houses became more active in the first quarter, an increase of 0.8 percentage points to 15.6 percent of total demand over the fourth quarter of 2014.
Macquarie Wealth pointed out that the reworking of the scheme aims to dent enthusiasm for property investment in Sydney and Melbourne, The Australian reported.
Nevertheless, Cash dismissed the speculation as "completely unfounded and incorrect."
Despite the fact that the Chinese constitute the majority of applicants, analysts agree that the policy changes are unlikely to discourage Chinese investors.
The latest DIBP statistics show 90.2 percent of SIV visa applicants are from China while 88.7 percent of Chinese investors have been granted the visa. At the end of March, 751 SIVs had been granted since the scheme's inception, The Australian reported.
"They will not be daunted by more demanding requirements from the SIV program, as long as their demand remains," Han Donglin, an expert on international migration at the Renmin University of China, told the Global Times.
"Real estate agents will cooperate with financial professionals to promote financial products that seem to be high-risk, but turn out to be low-risk by spreading risks or avoiding risky practices in reality," Zhong said, adding that local banks, reluctant to lose cashed-up investors, will also help agents.
Auslane's Zhang put it more simply, saying that "we can always find a way to cope with government policies in order to prevent client losses."
Experts also said that the seemingly tightened immigration program cannot stop fugitives suspected of economic crimes from hiding in Australia.
Nations such as the US, Australia and Canada are popular hiding places for Chinese officials fleeing the country or as a destination for assets they have allegedly stolen due to the lack of extradition treaties.
"In general, alleged fugitives do not resort to the SIV program which extensively reviews capital sources," Zhong explained.
Instead, they always apply for an employer-sponsored visa that does not require presentation of fund sources, or immigrate after their children have obtained Australian residency, he noted.