The Exodus of China’s Upper Class Continues

frontpagemag.com/the-point ^ | Oct 21, 2012 | Daniel Greenfield

[expat1000]

Most people missed the real point of the Bo Xilai story, which wasn’t about murder or the failed attempt to create a populist new Cultural Revolution. It was about how China’s upper class is trying to get as much money out of the country before the collapse happens.

After years of money flowing in, in the past year the trend has been reversing: cash is beginning to flow out of China. The Wall Street Journal estimates that $225 billion left  China in the 12 months leading up to September.

225 billion is serious money, even in a country with a GDP of 7 trillion, and as discussed previously, it’s one reason why China’s ruling class is afraid of American economic failure. America is the place, or one of the biggest places, where they keep their money.

China’s elites know better than anyone else how much of the economic growth is a scam and how much of China’s Century is  a sand castle built on water and they are taking care of their families first, moving as much capital abroad as they can into investments in safer countries.

Meanwhile their children pick up Western degrees and stay there. Even when they come back, they often retain some links that will allow them to quickly relocate at short notice.

China is not betting on China. It’s betting on the West.

[PGR88]

Its true. You can’t get very wealthy in China without some kind of corruption and involvement with the Government. Its a communist country after all. They know what it is all about

The wealthy Chinese I know all have properties in California, Singapore or Hong Kong. Their one precious child is, without fail, at a university in the USA, Australia or somewhere similar. Gold sales to Hong Kong (and China) are booming.

[RightOnline]

I believe it........and frankly, much as it pains me to say it........smart Americans are doing the same thing.

[PA Engineer]

The wealthy Chinese I know all have properties in California, Singapore or Hong Kong.

And Vancouver.

[Halgr]

And not even Romney, if elected is going to able to fix the coming economic collapse....

This is a good article if only folks could see the implications here.

[Red Dog #1]

I've thought for sometime now that China is a great deal more fascist than communist.

[SunkenCiv]

Thanks expat1000.

China's upper class is trying to get as much money out of the country before the collapse happens.

[The_Media_never_lie]

Coming soon to a country dear to you......perhaps?

[max americana]

When I was still living in Vancouver, Kanadastan I met a lot of Chinese business people and still am in contact until today.

The one thing I remember about this land developer whom I had dinner once years ago told me that doing business in canada is like communism, and back in China, it’s more capitalistic. It only requires ONE piece of paper to open up a store in Shanghai.

[Blood of Tyrants]

The Chinese upper class know that it is just a matter of time before the government nationalizes their assets.

[Nevadan]

China currently believes in capitalism far more than the Democrat Party in America.

[Nervous Tick]

>> much as it pains me to say it........smart Americans are doing the same thing.

I will NEVER EVER abandon the country I love, that was founded on GOD’s principles.

Never. For any reason, under any circumstances.

Are you calling me dumb?

[Chode]

do I really have to say it???

[ladyjane]

“The wealthy Chinese I know all have properties in California, Singapore or Hong Kong.

And Vancouver.”

Add to the list Harvard Square. They pay cash. Their bank accounts are in Switzerland. They pay 895M for a 1 bedroom condominium unit. Sometimes more.

[Nervous Tick]

Do you ever actually SEE them? Or are they absentee property owners?

Just curious. I have no point to make.

[ladyjane]

Yes. I see them. They are not completely absentee.

They send their child (usually one child) to Harvard or they want to send their child to Harvard. The child arrives with at least 1M in his checking account. Sometimes more. They have driven up the price of 1 and 2 bedroom apartments in Cambridge to astronomical levels.

[WilliamofCarmichael]

The Communist Party of the People's Republic of China regrets that once again there will be a delay in the PRC's ascendency to the world's number one superpower.

We apologize and urge western corporations to keep up their FDI and transfers of technology and intellectual property.

PRC's 1.4 billion upper-class-income and upper-middle-class-income people eagerly await the opportunity to transfer their money to your corporate pockets.. but these things happen. The new date for us is next Tuesday afternoon about tea time. . . .

[Nervous Tick]

>> The child arrives with at least 1M in his checking account.

How do you know THAT? (Again, no point to make, just curious)

>> They have driven up the price of 1 and 2 bedroom apartments in Cambridge to astronomical levels.

Don’t feel like the Lone Ranger; I think that is happening in a LOT of college towns (e.g. Austin, near where we live). The foreigners may not all be Chinese, but it’s happening lots of places in the US.

[ladyjane]

I probably shouldn’t say how I know that. They actually arrive with much more than that. After they buy their Porche, MB or BMW they have at least that in the checking account and the parents have already bought the apartment.

Yes, prices have gone up in college towns but do they get 900M for a 1 bedroom place?

Are they buying @ $250+ bottles of Cristal champagne? leaving $100 tips for the waitress.

[Nervous Tick]

>> I probably shouldn’t say how I know that.

No prob.

>> do they get 900M for a 1 bedroom place?

Naw, you got us beat; I guess we get a somewhat lower grade of political refugee than does Cambridge. :-)

[danielmryan]

It's not that paradoxical. What Greenfield calls "the upper class," aren't. If there's any real upper class in Mainland China, it's the Communist Party apparatchiks. There, the (non-apparatchik) rich folks are under the thumb and they know it. From time to time, they're reminded of their subordinate status.

So why wouldn't they want to get out? Staying in the homeland does have its emotional advantages, but after a certain point...

[Memo to Mr. Greenfield: The upper class in a nation do not leave en masse, with the exception of a class whose status has been formally and legally stripped away through revolution. Barring the coming of an outright revolution, if they're leavin', they ain't upper class.]

[jjsheridan5]

And not even Romney, if elected is going to able to fix the coming economic collapse....

This is a good article if only folks could see the implications here.

The implications of a collapse in China, which seems possible if not likely, are staggering. I have long felt that China, not Europe, was the most dangerous economic powder keg out there.

[expat1000]

Maybe the headline should have been “The Exodus of Assets of the Upper Class.”

[expat1000]

>>Yes. I see them. They are not completely absentee.

They might also be ethic Chinese from other countries just as Thailand.

[RightOnline]

Oh, grow up and use your head instead of....whatever you’re using.

[danielmryan]

Or maybe just "The Exodus Of The Business Class."

[Nervous Tick]

Your attitude towards staying and helping (”dumb”?) vs. cutting and running (”smart”?) makes for a fair question.

I notice you didn’t use that superior *head* of yours to answer my question, either. You just cut and ran. So maybe cutting and running is your style?

You and I both took an oath. I actually stand behind mine, and there’s a difference between us. Apparently you’re all about head; which Americans are “smart”, I should use mine, etc. Well, maybe believing in something and standing up for it is more of a heart and guts thing that transcends what you can wrap your magnificent “head” around.

Have a nice day.

[RightOnline]

I haven’t left the country, numbnuts. Get over yourself. Dollar-backed securities are hanging in the breeze and about to become utterly worthless. Don’t believe me; do your own research.....or don’t. I couldn’t care less.

Since you haven’t figured it out due to your pathetic chest-thumping, I’m talking about smart MONEY. Keep your coin here and watch it evaporate or confiscated. Knock yourself out. People far smarter than you or me are moving their resources to safer havens and for damned good reasons. If you don’t know why, then you haven’t been paying attention. Also not my fault, nor my problem.

Have a nice day yourself.

[Nervous Tick]

>> I’m talking about smart MONEY.

That’s all you needed to say, a-hole. What took you so long? I figured you were just another Alec Baldwin. Sorry.

>> Keep your coin here and watch it evaporate or confiscated.

There are other ways to protect your assets besides “keeping your coin here” and moving your assets abroad. Personally, unless you’re a multi-millionaire, I think moving assets abroad is a dumb move — the rule of law is still stronger here, even on one of our “bad days” — but (as you say) knock yourself out. It’s your money.

[Hotlanta Mike]

The Chinese in Vancouver are predominantly former Hong Kong citizens (British passports) who decided to leave around the time the hand-over from Britain to China took place.

[RightOnline]

Tell ya what, ace.....scroll on up and look at which of the two of us jumped in cleats-first on the other, then decide which of us is the “a-hole” here.

I rest my case.

[Nervous Tick]

>> I rest my case.

Yeah, you’re right; I was the first a-hole, and I wrongly called you out.

I apologize.

[RightOnline]

Accepted...no harm, no foul. We’re cool. It’s FR....such things happen. Take care. :)