Why wealthy people want to leave China?
In April, the consulting firm Bain and Co. and China Merchants Bank released a study which disclosed that about half of China’s richest people were thinking of emigrating.
It surveyed 2,600 “high net worth individuals” and found that nearly 60 percent of interviewees were either considering emigration through investment overseas or had already completed the process.
Now, another study has been released that broadly confirms the earlier findings. This one, conducted by the Hurun Research Institute and the Bank of China, interviewed 980 wealthy individuals between May and September.
It reported that 46 percent of respondents, all of whom had personal assets over 10 million yuan, or about $1.5 million, said they intended to emigrate. Of those, 14 percent had completed emigration procedures. There are about a million such millionaires in China.
The study found that a third of such high net worth individuals already own assets overseas, mostly in real estate. Another 30 percent are considering acquiring such assets within three years. Acquiring overseas assets is a step toward applying for investment immigration.
As to why wealthy people want to leave China, mostly for the United States and Canada, the reasons given often are that they want their children to have access to better education overseas, concerns about the security of their assets on the mainland and better living conditions.
The fact that such a high proportion of its most successful citizens want to leave the country clearly suggests that they perceive problems in China. Their departure will also inevitably be accompanied by a massive outflow of funds.
This is a wakeup call for the Chinese government. Almost a decade ago, under President Jiang Zemin, the Communist Party decided to admit capitalists into the party to give business people a bigger voice in decision-making. That was a step in the right direction.
Evidently, however, more needs to be done. Concerns expressed about the security of assets reflect continuing apprehension about changes in the party’s policies. For example, although private property is now enshrined in the constitution, state-owned enterprises are favored when banks give out loans. This is something within the government’s control to change.
The attraction of a better standard of living overseas is understandable, especially when major Chinese cities are regularly enveloped in a haze and the drinking water is unsafe. The government is not even honestly reporting the gravity of the polluted air that everyone must breathe every day.
For example, in recent days, the American embassy, which measures air quality, has disclosed that it is hazardous to breathe the air in Beijing but the municipal authorities say that the air is only slightly polluted. In fact, China does not even measure fine particulates known as PM 2.5, which are so small that they can penetrate deep into the lungs.
Chinese leaders, it turns out, benefit from special air purifiers in their offices and homes. This is in addition to receiving organic foods grown on government-run farms that do not use synthetic pesticides or chemical fertilizers.
Although China proudly proclaims that it has a “people-centered government,” it does not look so good for those people to find out that the government is giving itself the best of everything, including housing, schools, food ― and even air.
Most Chinese people do not have the means to leave, but the rich do and, if the government wants to halt the stampede out of the country by some of its most talented and wealthiest citizens, it will have to respond to their demands.
Some things should not be hard to do. To ease apprehension over changes in policy, the government should increase transparency of the decision-making process and allow the free flow of information.
Allowing more international schools with high educational standards without interference by the Communist Party should also be possible. If parents feel that their children are getting as good an education in China as they would overseas, there would be less reason for them to want to leave.
Another step may be harder: Dismantle the system of privileges for party leaders. By doing so, the leaders will show that they are not living in a cocoon but are really sharing weal and woe with the people and understand what they are going through.
If the Chinese government takes such steps, it will show that it has confidence in itself, which in turn will lead to greater confidence in it on the part of the people. If it doesn’t, the hemorrhage in wealth and talent will continue.
Frank Ching is a journalist and commentator based in Hong Kong. Email the writer at email@example.com. Follow him on Twitter: @FrankChing1.