Chinese cash and American jobs

MYRTLE BEACH, S.C. - The Chinese are coming! And they're bringing their golf clubs.

Chinese investment in America reached $12 billion last year, according to the Rhodium Group, an economic advisory firm. "Absent political headwinds," predicts Rhodium, "outbound investment by Chinese firms will continue to boom in 2015 and the United States will remain a key market."

Traditionally, much of that investment has focused on big cities like New York, or West Coast areas with large Chinese populations. But increasingly, Chinese investors are looking at new areas like Myrtle Beach, and one word helps explain that appeal.

Golf.

Chinese investors have paid about $47 million for 13 golf courses here in the last 20 months, according to a report in Myrtle Beach's Sun News. Ed Jerdon, a partner in three of the courses that sold recently, said: "The Chinese, they came with cash ... and they continue to buy."

That's good news for the local economy, which depends heavily on tourism but suffers from overbuilding and lack of capital to shore up struggling real estate ventures.

"I'm glad they're in the market," said John Draughn, who has helped broker sales to Chinese buyers, "because if they weren't, I don't know who would be buying this stuff."

The potential impact of this trend goes far beyond refurbished courses and rescued jobs. Many Chinese investors want to establish footholds for their families in America, and have also bought at least 100 private homes in the area.

These investors "want their children to study in the United States," Johanna Keamy-Tavares, an attorney specializing in business immigration law, told the Sun News. "Many foreign nationals want a better life for their kids."

A recent Barclays survey of China's wealthiest families found that almost half want to move abroad. According to The Wall Street Journal, 78 percent cite "better educational and employment opportunities for children" as their main reason for emigrating.

As part of their strategy, some of these affluent Chinese are applying for EB-5 visas, an immigration category that enables foreigners to establish legal residency in the U.S. if they invest $1 million in a project that creates or saves 10 jobs. The minimum investment drops to $500,000 in areas of high unemployment.

The investor can also obtain visas for a spouse and unmarried children under 21. Those visas can eventually be converted into permanent resident permits, or green cards, and even citizenship papers.

This program, started in 1990, languished for many years, producing little in the way of foreign investment. But in the fiscal year ending last September, all 10,000 available visas were avidly scooped up - and 85 percent of them went to Chinese entrepreneurs.

Chinese interest in this area is no accident. Myrtle Beach Mayor John Rhodes has made five trips to that country promoting his city, and local business owners have financed digital billboards and videos aimed at luring Chinese money and tourists.

The Sun News report was illustrated with photos of Chinese golfers taking lessons from local pros. One player wore a teal blue golf shirt with the word "CHINA" lettered in red across his back.

Yes, a few well-publicized scams have tainted the EB-5 program. But as Myrtle Beach demonstrates, on balance the effort has created sizable economic benefits.

"The one negative side to EB-5 is (that) people think China is buying up America, but the good thing is, these jobs would go away (otherwise)," Tom Morrison, a local business executive and EB-5 proponent, told the Sun News. "It helps job growth and economic growth."

In fact, the program's vast success is now threatening to undermine its value. The crunch of Chinese applicants is clogging the pipeline. As a result, the State Department announced, Chinese investors will face a growing backlog in the application process. Already, rival countries like Australia are bidding to attract wealthy Chinese who don't want to wait for their visas.

Rep. Bob Goodlatte, a Virginia Republican who plays a key role on immigration issues, told a conference on the EB-5 program last year that deleterious delays were unacceptable and he would push legislation to expand and streamline the visa process.

"This is a tremendous boon to our economy," Goodlatte said.

But reform efforts keep getting entangled in the larger and increasingly acrimonious debate over illegal immigration. Meanwhile, the U.S. could lose investors who want to build lives and businesses here.

This is nuts - a clear case of economic self-destruction. The Chinese are eager to come, bringing their cash, their kids and their clubs. We should be making it easier for them, not harder.

Steve and Cokie Roberts can be contacted by email at stevecokie@gmail.com

© 2015 Universal