Is China Losing its Luster?Monday, November 7, 2011 23:24
When I first arrived in China, I was having coffee with a friend who told me the best “China” strategy for expats was to rotate time between China and the US every two years. This would allow one to remain fresh enough on China, yet have a solid network in the U.S. that could be leveraged as well. In part this “strategy” is one that is borne from a place deep in the vast majority of expats in China…. that they have no idea what they will do should they leave China, and they better have options should (1) all hell break loose (2) should they tire of China or (3) should they find their visa would no longer be renewed.
Recently, what I am finding is that this conversation (of China exit strategies) is kicking into full steam.
To the point where I would say better than 90% of my conversations will touch upon the subject, and a significant number of conversations are solely about how to leave China. When is the best time. What are the opportunities to leave.. and would they missing be apart of the greatest show on Earth (as we are told it is).
It’s a conversation that interestingly enough was the focus of a Bank of China report highlighted, that found more than 50% of China’s wealthy were looking for the exit as well.
Not the first report I have seen on the topic, what I did find interesting was the (public) explanation for why many were looking to move:
Half of the investors said they want to leave for better overseas education opportunities for their children. About a third invest abroad as a step toward emigration, while a quarter of them do so to diversify and manage risk.
Observers believe that personal and capital safety is an increasing concern for the rich who are choosing to transfer their wealth overseas.
“We see too many worried entrepreneurs nowadays who are afraid that they would end up in prison for offending Chinese officials,” Beijing-based scholar Hu Xingdou
Some would say that this is nothing new, but with the average age of the respondents was 42, I’d even argue that the deteriorating environment (air quality, food issues, etc) are also catalyzing this move given they are likely to have small children (on average) in the 5-8 year old range… children who have been exposed to a number of health risks…. melamine, asthma, and diabetes.
Root causes aside, the wider meaning to China of potentially loosing large numbers of its wealthy should not be lost as it may mean that China is about to experience a brain drain (of expats and Chinese).
Not a good position for China, particularly at a time when China’s economy still has to make the transition to a “high-value” “innovative” economy, and when Beijing is doing its best to close the wealth gap.