Voice of Chinese Investors (Agent’s & Investor’s Prospective) – Episode 21
Mona Shah and Mark Deal sit down with Jack Gao and Jessica to talk about the Chinese market from the Agent’s and the Investor’s side. They both offer their unique perspective about EB5.
To get a better understanding of the investment market in China, Jack Gao, an Investor Agent, discusses his roles and responsibilities, as well as the possible hindrances that investors may encounter upon entering China. He also talks about the differences of the North and South Chinese Markets, the current situation in China that investors should be vigilant about, and he also shares noteworthy advice to anyone who is planning to invest.
Jessica joins the group to talk about her experience as an EB5 Investor. She shares her views about the US and European market as well as her two cents on some issues that she would you like to see changed in EB5, given the chance.
What is an agent?
- Normally, when investors go to china, they get agents on board to mediate and negotiate until the project’s completion. Nowadays, investors are cutting out the middle man by bypassing the agents and communicating directly with investors. Monna attests that this is a different way of doing things, but it works!
- Most traditional Chinese agents do not have a good reputation. Jack narrates some of his experiences where he has received complaints regarding some Chinese agents focusing more on their financial gain than the projects details. This lead to disagreements, which then affects how the project panned out.
- There are currently 800-1000+ projects in China. For the average person who is not well-versed in business or immigration, the EB5 process would be overwhelming. Jack explains that although he is a Chinese agent, his role is not like the usual middle man. He represents a law firm in China that helps investors have a good understanding of EB5. He assists in the project selection process, the EB5 application itself, and the steps to follow after the immigration service.
Difference in North and South Chinese Markets
- The key cities north of China that is teeming with investments can be found in Beijing and Shanghai. These first tier cities are modern and developed, with a great understanding of the European and American market. Real estate properties are also more expensive in these areas. The second tier cities like Dalian and Chengdu also offer lucrative investments.
- For an investor who plans to set its roots in the first tier cities, Jack suggests getting the services of an Investor Agent. Shanghai is a financial center and is oversaturated with investments. An investor would need an agent who knows the market’s movements and can weigh out the pros and cons of all prospective projects.
- If an investor opts to invest in second tier cities instead, the project costs are the same but the projected ROI is not as high as the first tier returns. The advantage though is that labor and employee wages are lesser. In cases like this, Jack states that an investor can directly communicate with the people without the mediation of an agent.
Why the U.S. Market?
- In the pursuit of finding the best prospects, aside from the U.S., Jessica has traveled to France, Italy, Hungary and Sweden to compare where she can make the most of her investments. She has decided that the U.S. has a stronger economy and provides more opportunities and possibilities.
- Jessica shares that she does her own research when it comes to searching for the best agent that would represent her. She does her own due diligence and makes sure that she is with an agent with a good reputation whom she trusts. Jessica also keeps abreast with the latest EB5 laws. She makes sure that she covers not just Social Media, but anything she can get her hands on regarding that project.
Changes in EB5
- When asked what she wanted to change regarding EB5, Jessica believes that it would be great to allow the family to be included in the application, and not just one person. She adds that the procedure to apply should be simpler and not too complicated.
- Jack shares that most of the investors he has worked with had issues regarding investment sources. He feels that there are better ways to make this issue more manageable.
SEC
- One of the first things an investor should do when selecting a good project is to check if that company is registered with the SEC. The SEC’s involvement aims to give confidence to investors, assuring them that the government has their best interests in mind by checking that all investments are compliant.
The American Dream
- Granted that Jessica’s EB5 application pushes through, she plans to focus on her kids’ education.