In one fell swoop, Congress can send a message to Beijing, attract Hong Kong’s best and brightest to the U.S., and create thousands of American jobs
In response to China’s recent implementation of the Hong Kong Security Law, which countries around the world have condemned as an attack on democratic freedoms, Congress sent the Hong Kong Autonomy Act, a sanctions package that penalizes banks conducting business with Chinese officials, to the President for signature. These measures are a good first step to push back against Beijing, but there are other tools the federal government should deploy to support the people of Hong Kong – one of which would also help the U.S. economy create desperately needed jobs.
Now is the perfect time to reform the federal EB-5 program so that Hong Kong residents can invest in the U.S., create American jobs, and escape the heavy hand of mainland China.
The EB-5 Immigrant Investor Program is a federal economic development program that already drives billions of investment dollars to markets from coast to coast, with a focus on rural and high-unemployment urban areas. According to a 2019 study by Economic & Policy Resources, the program added over $55 billion to U.S. GDP in 2014-15, creating over 355,000 jobs in the process. The best part? The Congressional Budget Office confirms the program has “no significant cost to the federal government” – it costs taxpayers nothing, because it is fully paid for by the investors it attracts! It’s a win-win program that could be used to great effect in Hong Kong – if Congress implements consensus-based reforms now.
Other countries are already using similar programs to help the people of Hong Kong. British Prime Minister Boris Johnson has already announced that the roughly 350,000 Hong Kong residents who hold a British overseas passport, as well as some 2.5 million who are eligible to apply for one, would be granted renewable visas allowing them to work in the UK and put them on a path to citizenship.
There is precedent for this strategy in North America. In anticipation of the end of British rule over Hong Kong almost 25 years ago, Canada used its version of EB-5 to welcome professionals and entrepreneurs from Hong Kong. The result was not only a generation of highly educated and talented job creators, but billions of CDN dollars in foreign investment that transformed areas like Vancouver, British Columbia, into world-class gateway cities. In 2015, the Real Estate Board of Greater Vancouver estimated the dollar volume of residential resales attributable to Hong Kong investment at $38.6 billion.
The U.S. should follow suit. The U.S. is already home to more Hong Kongers than any other area outside mainland China, but we compete for their investment and talent with markets like the UK, Canada, Singapore, and Australia. Hong Kong is already a top 10 source for inbound EB-5 investment and creates thousands of jobs in America, but the current investment volume is a fraction of what is possible. To increase the amount of both investment and jobs, Congress can implement Hong Kong-specific reforms for EB-5 that would allow Hong Kongers to escape the anti-democratic crackdown and find freedom in America. Common sense reforms like requiring Hong Kong EB-5 investment to occur in rural areas or census tracts of high-unemployment would catalyze economic development and avoid the investment concentration problems Canada experienced in the 1990s. Given the urgency of the situation in Hong Kong, the federal government could establish a window of time for fast-track processing of Hong Kong investors and exempting them from the annual visa caps that would normally apply.
The ultimate details of a plan should include these and other reforms. Senate Majority Leader Mitch McConnell has indicated a strong interest in supporting the people of Hong Kong. Including Hong Kong specific EB-5 reforms in a sanctions or recovery bill would reinforce bedrock American principles of freedom, democracy, and economic opportunity – and send the right message to China and the world. The time to act is now.