Will Trump's Moves vis-a-vis Hong Kong Threaten EB-5?

By David North on June 1, 2020

According to a recent New York Times article, the president said he would "'begin the process' of ending the American government's special relationship with Hong Kong ... as part of a broad effort to retaliate against China".

That article went on to mention "visas" twice, but there was no more specificity about the on-going special migration arrangements for Hong Kong residents.

If this were an administration gifted with policy nuances, one would not ask the question, but might this White House hurt the EB-5 program in its rush to make a dramatic, anti-China gesture? Supposing it decided that the special provisions for immigrant visas from Hong Kong were to come to an end, or even be suspended?

Currently, as we reported earlier, the issuance of EB-5 visas — generally — has slowed, suffering from both the higher initial investment ($900,000 rather than the earlier $500,000) and from the huge backlog of these visas for people from China.

The special migration arrangements for Hong Kong (as well as the smaller, formerly Portuguese city of Macau) treat those territories as if they are separate nations, which means that there are no backlogs of U.S. visas of any kind from the two places. Meanwhile, as the Chinese market for EB-5 investments has cooled, it has warmed up for Hong Kong (with backlogs not a problem.) A recent trade article indicated that the number of EB-5 visas for Hong Kong moved up from 15 in 2014 to 183 in 2018.

The special migration arrangements, including those for EB-5, make it easier for people who prefer the United States to China to leave that country. Terminating them would not seem to be much of a threat to China.

Maybe Jared Kushner will figure that out, as his family has benefited from the EB-5 program. To be a bit more charitable, maybe he has sensed this but given a possible conflict-of-interest situation he will withdraw from dealing with at least the EB-5 part of the issue.

It will be interesting to see how this develops.