United Country Realone Realty

China's 'Wealth Drain': New Signs That Rich Chinese Are Set on Emigrating

BEIJING — Is China facing a "Wealth Drain"? Do too many of the best and brightest — and above all, richest — Chinese dream of packing up their accumulated capital, and going to live abroad?

According to a new study, a majority of Chinese who have more than 10 million Yuan ($1.53 million) worth of individual assets find the idea of real—estate investment a lot less tempting than so—called "investment emigration." Nearly 60% of people interviewed claim they are either considering emigration through investment overseas, or have already completed the process, according to the 2011 Private Wealth Report on China published by China Merchants Bank and a business consulting firm Bain & Company. The richer you are, the study suggests, the likelier it is that you resort to emigration. And among those who possess more than 100 million yuan, 27 % have already emigrated while 47% are considering leaving.

The fact that more and more rich Chinese are seeking to emigrate is turning into a hot topic in China, and statistics prove that the trend is a real one. According to Caixin online, a Chinese website specialized in finance, the compound annual growth rate of overseas investment by Chinese individuals approached 100% between 2008 and 2010. The compound growth rate of the Chinese who used investments to emigrate to the United States in the past five years is 73%.

So why are wealthy Chinese so eager to leave their country? The simplest answer is that there are a lot of things in China that even the richest cannot buy (emigration is obviously not one of them). China's rich are fond of saying that nothing "is a problem if money can solve it." Among the irresolvable problems that spark emigration, there are material ones, and emotional ones.

The former includes issues like laws and regulations, the education system, social welfare, inheritance tax, quality of air, investing atmosphere, food safety, ability to travel, and so on. In short, these are the material factors that any State must provide to its people in order to ensure their happiness. In emerging countries such as China, these factors are still often found wanting.

Emotional reasons behind rich people's immigration are generally linked to the lack of a sense of personal safety, including safety of personal wealth, as well as fear about an uncertain future.

It thus appears that it is a certain "lack of well—being" that is pushing wealthy Chinese to emigrate. The results of the Private Wealth Report are very much in line with other studies. A recent Gallop Wellbeing Survey showed that most Chinese people feel depressed, even as China has sky—high economic growth rates that Europe and America can only dream of. According to the survey, which asked respondents to choose between "thriving," "struggling," and "suffering" to describe their situation, only 12% think themselves as "thriving," while 17% describe themselves as "suffering," and 71% "struggling." The number of Chinese who feel that their life is improving is comparable to the number of Afghans and Yemeni who feel the same way, while the number of persons feeling they are "struggling" is approximately the same as in Haiti, Azerbaijan and Nepal.

United States investor

A law dictionary, adapted to the Constitution and laws of the United States of America, and of the several states of the American union, with references to the civil and other systems of foreign law

Country life

The New country life

The Indicator