Tuesday, October 16, 2012

Cash Leaking Out of China

I have blogged extensively about the economic conditions of China, as what happens in China is very important to the United States.  Now I have repeatedly said that the claims that China would overtake the US are wrong as I believe there are fundamental problems that exist in China that will prevent them from surpassing the US in the near future.  One thing that I have mentioned is that millionaires are leaving China as one of my cases about an imminent crisis that will hit the middle kingdom, a canary in the coalmine if you will.  Well new data from the Wall Street Journal shows that over $ 225 billion dollars has left China

Now you might argue that this news means nothing whatsoever. China is a nation with an increasingly burgeoning wealthy population and it would make sense that the noveau riche would purchase items throughout the world. But the article does make special note to include the quote from a Hong Kong immigrant consultant who says Chinese are buying permanent residency and passport like a certain designer good.  The 'permanent residency' is the most important part.  Passports don't allow for permanent immigration, but permanent residency does. And in some instances permanent residency is not that hard to acquire
Cyprus has become a popular investment destination for wealthy Chinese. The island nation in the Eastern Mediterranean gives permanent European Union residency to anyone who spends €300,000 on a property.
 
 That is just shy of $ 400,000 in the United States.  The EU certainly has made it easier to immigrate than the US has with their E-2 visa, and I can personally attest that Chinese have invested heavily into the US to qualify for one.

And this makes one ask the question. If China is the next super power, then why are billions of dollars from Chinese million and billionaires purchasing investment visas in the US and permanent residencies in Europe?  While the Japanese miracle during the mid to late 20th century did see a lot of Japanese companies purchasing assets in Europe and America, and a lot of tourists to boot; Japanese citizens didn't try to purchase residencies in other countries, they stayed and lived in Japan.  China is a whole other beast entirely.

China has been a state run gangster economy for years, if not decades. And the roosters are starting to come home to roost. Chinese who have means, either legitimate or ill gotten, have seen what has happened to Bo Xilai, and know that another wave of uncertainty is coming.  China, for a nation that strives for a harmonious society, undergoes transformation tempests that are very violent, and often very bloody.  It has been this way in the middle kingdom from time immemorial, and I have seen little to indicate that anything fundamentally changed.

2 comments:

  1. China's very interesting.

    They are a country built on cash bribes. If you want to succeed with any business you must make it worthwhile for those who are above you.

    If this many Chinese are really moving their money out it must be for good reason. It's no secret that it happens to all nations, the US, Russia, so for it to happen to China shouldn't be that surprising. While they have their nations system to thank for granting them their success they are probably smart enough to realize it's not a good place to hang around anymore than necessary just like everyone thinks about their own unscrupulous nations.

    ReplyDelete
  2. It is very true. Americans often take for granted the continual stability, relative rule of law, and civility that is marked throughout each administration. The Chinese do not think this way. The cultural revolution, the take over of China by Mao, the take over of China by Chiang Shek, the civil wars between the imperialists and nationalist Chinese so on and so forth, are all fresh in their minds. They know that if they are on the wrong side of the powerline come the transition that things could get very ugly for them.

    ReplyDelete

Disagreements and countervailing views are welcome, however, comments will be deleted if:

-They have emoticons.
-If it is obvious that you have not read the post.
-Obvious Spam, and it takes me about a quarter second to determine if it is spam since you all write your comments the same way.

About Me

My Photo
Seattle resident whose real name is Kevin Daniels. This blog covers the following topics, libertarian philosophy, realpolitik, western culture, history and the pursuit of truth from the perspective of a libertarian traditionalist.