WASHINGTON – If China were really the wave of the future, as many optimistic commentators argue, soon to replace America as the world number one economy, how come that so many rich Chinese leave or plan to leave the country?
The rich are leaving
A recent Barclays survey quoted by the WSJ indicates that 47% of all Chinese with significant assets ($ 1.5 million) plan to move abroad. Yes, the wealthy, that is those who gained the most from China’s 30 year uninterrupted economic boom, go away, or want to go away. They buy properties in London, Paris or in the US. They send their children to study in America, Australia, Canada or Europe. In 2012, 70,000 Chinese students who went abroad did not come back to China.
Cash in suitcases
On a related note, most cases of illegal importation of large amounts of cash (in old-fashioned suitcases) into the US involve Chinese nationals who try every possible avenue to take their money out of China.
Furthermore, the Chinese constitute by far the largest group of those applying for fast track US residency via an “Investor Visa”, a controversial program that allows foreign national to become US residents by investing large sums of money in jobs creating enterprises in America. Wealthy Chinese see this as an easy way to “buy” their right to reside legally in America.
Last but not least, powerful Communist Party officials also position themselves for an exit. The now common expression “naked official” indicates a local or provincial party boss who has already sent his family abroad. Unlike the wealthy businessmen, in most cases these functionaries gained the money that allows them to pay for houses in America and expensive college tuition fees for their children through illicit practices, i.e. old fashioned corruption.
But the point is that they follow the same trend. They want to get away, or at least they are actively paving the way for a future exit.
Why leave a booming economy?
Once again, if China were indeed the new economic model, soon to surpass old and sclerotic America, why is it that those who benefited the most from this unprecedented economic expansion want to get out and resettle in declining America?
History usually shows that immigration goes in the opposite direction. People from all over the world want to go to the country where there is a booming economy, (today’s China). Enterprising businessmen and adventurous young people want to get a piece of the action.
Sure enough, there have been and there are plenty of foreign investors in China. But Apple or General Electric going to China do not balance hundreds of thousands of rich Chinese individuals and their families who leave the country.
Although some of them may look at investment opportunities in their newly adopted countries, most of them are guided by the desire to leave China and settle in Western nations.
Trouble in Shangri-La?
Once again, why leave the place where huge fortunes have been made and where the economy still grows at 7% a year?
Could it be that these millionaires know (probably better than most) that, under the surface, this modern Shangri-La is not so shiny?