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Worldcrunch

The Real Reason China's Super-Rich Are Packing Up And Moving Abroad

Article illustrative image Partner logo Going somewhere? Pudong Airport, Shanghai

-Analysis-

BEIJING - Zhang Lan, founder of restaurant chain South Beauty, is one of China’s richest women and a symbol of the country's booming economic success. Thus it is not surprising that the recent news that the billionaire has renounced her Chinese citizenship to take on a foreign nationality has been met with some significant national soul-searching.

Though it is still not clear what nationality Zhang will take on (China doesn't allow for dual citizenship), her choice is part of broader trend of wealthy Chinese emigrating overseas.

According to the 2011 Private Wealth Report, 27% of Chinese entrepreneurs worth more than 100 million RMB ($15.9 million) have already emigrated, while another 47% say they are considering doing so. The number of these so-called “naked businessmen” is massive. The main reasons for businessmen emigrating are: their children’s education, protecting assets, and preparing for retirement.

Increasingly, the general Chinese public has grown aware of this dramatic trend. Last year, out of 5,000 investment immigration visas issued by the U.S., Chinese people accounted for two-thirds of them.

Undoubtedly, the most dazzling fact in all of this is that over 70% of China’s privileged have either emigrated or are on the way to emigrate. It is definitely not normal for 70% of a country’s wealthy class to want to leave the place where they were born and made their fortune. When we connect this piece of news to another study conducted a few years back in which it was said 80% of China’s wealth is in 20% of people’s hands, then it is easy to imagine the scale of the loss of China’s national wealth.

Apart from the immediate loss of national wealth, massive emigration will no doubt also shake the public’s confidence in the future prospects for China’s domestic development. In general, unless their riches were amassed by unlawful means, the rich are the economic elite of a country.

The choices of a country’s elite influence the emotions, judgment and decisions of ordinary people. When the rich pin the hope of their children’s education and retirement on other countries, it means that they have a pessimistic view regarding the improvement of their country’s education and social security. When people flee a country just to protect their assets, it’s further proof that they do not hold too much hope for the country’s rule of law.

Flights of fancy

Many people like to take a moral high ground and criticize the rich Chinese emigrants. A renowned scholar recently commented on China’s emigration trend in an interview. At the turn of the 20th century the Chinese students who went to study abroad all tried to come home as fast as they could to serve their country, whereas the Chinese children who go abroad today scramble to find ways to stay in their host countries, even if they've barely graduated from high school.     

I personally prefer to look at the issue from another angle.

First, in my view, the fact that the rich are fleeing is sad and even worthy of compassion. Out of the three main reasons for the rich emigrating, their offspring’s education is the most important. This says that, like every parent, wealthy people want their children to get the best education they can. As for protecting their assets, it’s related to the status of the rule of law in China, while hoping for a sound retirement is just human nature. None of these reasons are about personal happiness. In other words, the wealthy do not leave just for the sake of better material conditions.

The flight of the rich also helps to reverse the deep-rooted “eating philosophy” pursued by China’s rulers, where development is the supreme ideal, and as long as the people have enough to eat, all dissatisfaction will disappear. Compared to this, universal values such as rule of law, freedom, and human rights are just quaint ideas.

Nevertheless China’s wealthiest, the people who eat the most, are voting with their feet. This may indeed mark the end of theeating philosophy.” The fleeing wealthy show us that, as human beings, we have spiritual needs and need to be respected beyond just having enough to eat. When the citizens of a country turn to other states for these things, we should not blame them. What we should rather think about is the quantity and quality of public service that this country provides.

From what Xi Jinping said in November’s Communist Party Congress, we can undoubtedly see that China’s new generation of leaders has started to take stock of the problem. Since Xi became China’s leader, “livelihood” and “anti-corruption” have become the most repeated expressions in his speeches.

It’s easier to shout slogans than to act. If our country can improve public services, accelerate the process of the rule of the law and put an end to corruption as fast as possible, China will become a pleasant country to live in. And then, I’m convinced that the rush to exile by the rich will come to a halt.

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About this article source Website: http://eeo.com.cn/

The Economic Observer is a weekly Chinese-language newspaper founded in April 2001. It is one of the top business publications in China. The main editorial office is based in Beijing, China. Inspired by the Financial Times of Britain, the newspaper is printed on peach-colored paper.

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