The downtrodden loonie has found a new friend in China.
Armed with a currency that buys 12 per cent more Canadian dollars than six months ago, Chinese travellers and businessmen are clamouring for visas to cross the Pacific.
In January, Chinese applications for visas to Canada climbed 51 per cent over last January, rising to roughly 15,000 in a month that is typically among the year’s slowest for visa requests. The rise comes as a sudden boost in Chinese buying power combines with domestic economic weakness to prompt growing interest in Canada from Chinese tourists, investors and homebuyers.
“We were surprised, because it’s a much higher growth than what we would have expected,” Canada’s Ambassador to China, Guy Saint-Jacques, said in an interview. To deal with the deluge, the embassy has asked Ottawa to send over enough temporary workers to boost its visa processing ranks by nearly 50 per cent.
The surge in numbers is set against a broader rise in visitors to Canada. Over the first 11 months of 2014, visitors from Japan, South Korea, Mexico and India were all up double-digits – but none as much as China, whose overnight visits were up 29.4 per cent, according to the Canadian Tourism Commission. (Visits from Britain, France, Germany and Australia were each up roughly 5 per cent in the same period).
The sudden surge in Chinese visits comes after years of steady increases, with the number of Chinese visitors to Canada nearly tripling since 2009. That was the year Beijing granted Ottawa “approved destination status,” which gave Canada advantages in marketing to China and opened the door to Chinese group visits.
More recently, tourism officials have credited the rise in tourists to Canada’s top ranking as a place to visit by the Reputation Institute, which conducts an annual national brand survey. Canada is lagging broader trends, however, with the United Nations World Tourism Organization reporting a 4.7-per-cent rise in worldwide tourism. The first 11 months of 2014 still saw an overall 3.1-per-cent rise in overnight visits, as the growth from overseas markets was tempered by falling U.S. visitor numbers.
Where Canada is succeeding is with China, particularly compared with international rivals. Australia last year saw less than half Canada’s growth in Chinese visitors while Britain statistics show a slight decrease in travellers from China in 2014.
The loonie, and broader opportunities for Chinese visitors – including their increased spending power in property markets such as Vancouver, and a desire for Western education – are all factors.
“A cheaper Canadian dollar reinforces the perception that it is a good time to buy Canadian real estate,” said Dan Scarrow, a Shanghai-based executive with Macdonald Realty who has worked with numerous Chinese buyers coming to Canada.
He notes the Chinese yuan has also, in tandem with the U.S. dollar, made big gains against the Australian dollar and the euro. And “the perception is that the Canadian dollar still has some more weakness moving forward, so there’s no immediate pressure to make a quick decision. That said, those that were on the fence about buying before are now more likely to invest in Canada.”
The yuan’s strength relative to the loonie is not just a recent phenomenon – it’s up 18 per cent over the past 18 months, providing a sizable discount for Chinese investors and homebuyers looking to Canada. And it comes at a time when a slowing Chinese economy and increasingly long-lived corruption crackdown are pushing well-heeled Chinese to move their money elsewhere. China’s home prices are also cooling, while Vancouver’s keep charging ahead.
A Barclays survey last year of Chinese people worth $1.5-million (U.S.) found 47 per cent planned to get out of China in five years. Their top two destinations: Hong Kong and Canada.
“What is different today compared to ten years ago: not only do you have more millionaires who want to immigrate to Canada, you also have more millionaires wanting to keep their capital safe in Canada, without living here,” said Richard Kurland, an immigration lawyer in Vancouver who works with wealthy clients in China.
Education is another key reason, as monied Chinese seek foreign schools that have sound reputations and are not infected with propaganda. In recent months, a Beijing-led ideological campaign has extended to universities, where professors have been warned against the dangers of Western thought, while heightened Internet censorship controls has made it harder than ever for those inside China to access outside knowledge.
If the loonie remains low relative to the yuan over coming months, which are the critical university enrolment period, it “should result in greatly increased numbers of students destined for Canada,” said Victor Lum, the vice-president of Well Trend United, an immigration company with offices across China. “Increases of at least 20 per cent are expected.”Report Typo/Error
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