'Runxue' or 'planning the escape' is the new term in vogue among the Chinese middle class - Plataforma Media

‘Runxue’ or ‘planning the escape’ is the new term in vogue among the Chinese middle class

The real estate crisis and the zero-case policy generate growing insecurity about the future. Some already ask friends for advice on the economic and social situation in other countries, such as Portugal

“Runxue”, or “planning the escape”, is the new term in vogue among the Chinese middle class. “These are people who were born and raised [in Shanghai] and who no longer recognize the city.”

In restaurants and cafes in Beijing or Shanghai, exchanges of advice between groups of friends and family on the best countries to emigrate or how to obtain a passport and visa have become common, at a time when the Chinese authorities are making it difficult to enter and leave the country. country.

The phenomenon is not new: in Portugal, for example, the Chinese are traditionally the main investors in the “gold visa” program.

The novelty is the desire expressed by the Chinese to establish themselves permanently abroad. The term “Runxue”, which combines the English word “Run” (“to flee”, in Portuguese), and the Chinese word “Xue” (“to study or analyze”, in Portuguese), has become viral on the country’s social networks. .

Although wealthy Chinese families have always wanted to obtain residency abroad, most have chosen, to date, to remain in China, given the economic opportunities that the country traditionally offers. “More than 90 percent of customers [of the “golden visas”] do not live in Portugal”, a source in the sector explained to Lusa.

André Zhou, born in Braga and owner of two Portuguese restaurants in Shanghai, told Lusa that “more and more Chinese friends” ask him “about the price of houses, the quality of education and how people live in Portugal”.

Between April and June, the population of China’s most cosmopolitan city was shaken by a two-month lockdown, marked by scenes of violence, lack of access to food or health care, and the relentless and chaotic application of epidemic prevention measures, as part of the Chinese “zero cases” strategy of Covid-19.

Icey Chang, an immigration consultant for Canada residing in Beijing, explained to Lusa that the number of requests “more than tripled” in recent months, as “insecurity about the future” has increased among the country’s population. .

Another factor with strong implications for the Chinese middle class is the real estate crisis. Faced with a cramped capital market, the sector concentrates a huge share of Chinese families’ wealth — around 70 percent, according to some estimates.

A campaign launched by Beijing to increase the liquidity ratio in the sector has sparked a wave of defaults among some of the country’s main construction companies. The most emblematic case involves the Evergrande group, whose liabilities exceed Portugal’s Gross Domestic Product (GDP).

The crisis threatens to infect the financial system, as homeowners in China, whose work has been left unfinished due to the precarious situation of construction companies, refuse to pay the mortgage payments.

Real estate and construction account for more than a quarter of China’s GDP (Gross Domestic Product) and have been an important driver of the country’s economic growth over the past two decades.

This period seems to have come to an end. “There was a lot of fictitious growth in China,” Michael Pettis, a professor of financial theory at Peking University’s Guanghua School of Management, told Lusa. “Overinvestment in all kinds of construction projects has inflated growth for many years,” he said.

Pettis pointed to the example of Spain before the 2008 international financial crisis. “While this lasts it is great, but when the increase in debt is unable to generate returns, the model becomes unsustainable, giving rise to an economic slowdown and potential increase in unemployment ,” Pettis described, predicting a similar scenario in China.

Portugal resumes golden visa application

In the meantime, applications for golden visas in Portugal have resumed and several new applications for Residence Permit for Investment (ARI) have already been submitted, after a six-month stoppage.

According to the Portuguese Association of Real Estate Developers and Investors (APPII), “the platform for the insertion of new ARI of the Foreigners and Borders Service (SEF) is finally operational”.

The association’s president, Hugo Santos Ferreira, considered this recovery “positive” and was “with satisfaction that the competent authorities have addressed APPII’s concerns in order to reactivate the possibility of submitting new applications for ‘golden visas’”. “We are once again experiencing a social and economic crisis whose duration and consequences are still unknown. But, unlike the other recent crises, this one represents an important opportunity for Portugal. Our country offers unique conditions to those who seek us as an investment destination, due to safety, location, quality of life, among others”, he said, adding that “it is essential to have the residence permit process for investment 100 percent operational to attract and receive with dignity those who want to invest in our country”.

Data released by the SEF on Monday indicate that investment raised through ‘golden visas’ grew 94 percent in May, compared to the same month of 2021, to 53.8 million euros. Last month, 30 ‘golden’ visas were granted to China, 30 to the United States, 14 to Turkey, 11 to India and 10 to Brazil. During this period, 204 residence permits were granted to reunited family members, with a total of 735 for the year.

It should be noted that in the first five months of the year, investment raised in Portugal amounted to more than 238 million euros. This refers to requests submitted before the recent outage of new submissions.

Este artigo está disponível em: Português 繁體中文

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