Yuan drain as China's rich move West

Tania Branigan in Beijing

A gold-plated Infiniti sports car being tested in Nanjing. China is predicted to become the world's largest luxury goods market by 2020

Sherry Wang misses many things about China. It's taken time to get used to western food, and day-to-day communication is harder; even requesting goods in a convenience store can be a struggle.
But the wealthy entrepreneur has no regrets about her decision to emigrate to North America two years ago.
The education system "makes my son happy every day", she said, by encouraging personal development, in contrast to Chinese schools' rigid focus on grades. And the family no longer fret about the safety of their food.
Wang's choice is part of a much broader trend: China's rich appear to be increasingly keen to go west. Almost half of China's millionaires are considering moving abroad, according to a survey released recently by Hurun – best known for publishing a Chinese rich list – and the Bank of China.
The report found that 46% of the 980 people surveyed had thought about emigrating; 14% had done so already or applied to do so. Most wanted a better education for their children. The findings chimed with research by China Merchants Bank and consultants Bain this spring which suggested that more than a quarter of those with more than 100m yuan (about £10m) had moved abroad and almost half were considering it.
Many sought immigrant investor status, which grants residence rights to those making large investments.
"After establishing a decent economic foundation, of course people tend to move to places where a better quality of life is available," Wang said.
Businessman Eric Wen, whose family are considering a move from Shanghai to the US or Canada, agreed: "The biggest motivation is life quality and education for my children. The environment, especially air quality, is much better in these countries," he said.
But Wang acknowledged there was another motive, too: "My husband was worried that China would suffer political turmoil some day and it is safer here."
That instinct – and the resentment that rich people can attract – makes the subject of emigration sensitive for many. Wang asked that her Chinese name, and her new home, should not be disclosed.
Rupert Hoogewerf, of Hurun, acknowledged that some were nervous about stability, particularly before the transition of power to a new generation of leaders next year. But he suggested that people seemed to be seeking an "insurance policy", pointing out that few of the Chinese wealthy wanted to trade in their passports.
While some think another nationality may help protect "ill-gotten" wealth, most seek residency rights. "There is concern about social and economic and potentially political unrest – but the growth far outweighs the potential risk. This is the fastest-growing economy [they could work in] … and this is the place they know best," Hoogewerf said.
A US-based business development consultant said they were investing initially, with a long-term idea of moving – "first their children in many cases, then their wives, then themselves". He said the number of Chinese clients inquiring about emigration had surged. "A year ago I would have these conversations once a month. Now it's dozens of times."
Although education was the big issue, "they are not sure what's going to happen with 2012 coming up and the party leadership in question … It's the possibility all hell might break loose."
As he pointed out, maintaining a lavish lifestyle can prove unexpectedly costly outside China. But while drivers or maids may be a good deal more expensive than at home, that is not an issue for the super-wealthy. One of his clients recently bought a $6.2m mansion in California for his son to live in, snapping up a yacht at the same time so the young man could make use of the property's private dock.
Such indulgences are poorly received by China's less privileged citizens. Xia Xueluan, a sociology professor at Peking University, told the People's Daily website that rich people had benefited from the hard work of many others in China and should not move overseas with their assets. "In comparison to the behaviour of … patriotic Chinese overseas during the anti-Japanese war, the rich people are carrying money away in the good times, which makes them [morally] small," he said. Others argued it was pointless to expect better of the wealthy.
Fan Zijun, a critic and writer, said that although ideally all citizens should show civic awareness and a sense of responsibility to China, it was "childlike, even naive" to expect them to do so. "If rich people really had such high consciousness and self-discipline, would the wealth gap, social equality and other issues have become the great problem that perplexes us now?"
Additional research by Han Cheng

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