Just what we need, more fucking rich people.
China saw the world’s biggest outflow of high-net-worth individuals last year and is expected to see a record exodus of 15,200 in 2024, dealing a further blow to its economy, a new report says.
It’s interesting how through the neoliberal lens this looks like “a blow” to their economy. But from a Keynesian or MMT lens, China doesn’t need high net worth individuals to drive the economy. Public investment can and has done this in China as well as many other parts of the world.
From another angle, letting high net worth individuals flee, could reduce apparent wealth inequality in China.
Does China have capital flight laws? Can they allow the millionaires to leave whilst retaining the actual material wealth?
I think that, in theory, you can’t really move all your money outside of China. In practice, I’m pretty sure there’s a huge loophole in Macau where you can exchange all your RMB money for casino chips and then exchange them for dollars (or something like that) instantly, allowing you to move huge sums outside of China. There are probably a thousand other ways to bring out money we surely don’t know about.
There are tons of millionaires and billionaires in China, and I doubt they want to be at the complete mercy of the CCP. They’ve been moving money outside of China for decades now, with this and other loopholes. Many of the billionaires are complicit with members of the party, obviously, sharing the money with those in power in order to do what they please.
Money is just a social contract though. What they can’t take with them are the means of production. Stuff like factories that they used to own will stay in China. What people in the west don’t seem to understand is that the economy is fundamentally about allocation of labor and resources towards meeting the needs of the people. Money of itself has no inherent meaning, that’s why the government can just issue as much currency as it needs.
Many of the billionaires are complicit with members of the party, obviously, sharing the money with those in power in order to do what they please.
If that was the case in practice then they wouldn’t be fleeing China to go to places like US where they can do as they please.
I mean, if they are fleeing, they are fleeing with their money. Capital is essential for an economy and if capital leaves the country, it means that you have less growth, less investment and less prosperity in general. You can’t even tax that capital once it has left the country.
Plus, many of those low-millionaires are probably some of the most competent and knowledgeable people (not the hundreds-million industry captain with ties to the government, but the plant manager or lead researcher, lead developer etc. i.e. those who’ve made a small fortune through their ability). Getting rid of lead people is not exactly beneficial for an economy.
And sure, making everyone poor will reduce apparent wealth inequality, you’re right.
In fiat economies financial capital isn’t a limiting factor since it can be and is created out of thin air as needed. The need for private citizens’ money to grow the economy is often repeated idea but it doesn’t hold water when you consider how their money was created in the first place. Specifically, currency issuing governments spend money into existence before being able to tax it. Therefore they don’t need to tax in order to spend. If there are the real resources needed for certain economic activity to occur but the limiting factor is the lack of money, a competent government will spend the required money into that sector and the activity will materialize. There’s no need to wait for private individuals to accumulate it over time in order to spend it to enable this economic activity. Crucially, even if you wait, the money is still going to come from a government’s “printing press.”
Other types of capital such as human, intellectual, can limit growth since they’re not as easily replaceable. That’s why I think your second point about who those people are is important. It is possible that they’re knowledgeable workers in different domains. It is also possible that they’re people skilled in exploiting others. If we assume the former, losing them isn’t ideal. If we assume the latter, then it’s a social value judgement of whether you want to have more or fewer of these types in your society, but they’re not essential for economic growth.
Fiat currency doesn’t work like that. It is a way to hold value so that a potato farmer isn’t exchanging a bushel of potatoes for a dentist appointment. It still needs to be backed by productivity in the economy, otherwise you just get hyperinflation. There is no magic.
It’s actually difficult to bring their money with them due to strict transfer limits. China has strict capital controls.
Even if they exfiltrate the money, China as every other fiat economy can replace it using a keyboard.
If these folks are indeed knowledgeable and experienced workers, then having them leave isn’t ideal. But whether they’re such people or not is an open question. They might also be people who are good at exploiting others’ labor for profit, just like their western many-multi-mil counterparts.
Please keep them, we don’t need more millionaires.
The system that allows them to exist and that they control to always keep like that (and maybe you guys wanted to say billionaire, with current exchange even being multimillionaire is not something that distant)
It really depends, millionaire in NYC? Dime a dozen, millionaire in Mexico, NY? They would be able to mess with local politics, screw up the housing market, etc. And I really mean multi- millionaire but that’s what I assume would be coming this way from China, not someone with 1-1.5 million, but a couple times that at minimum.
So I shouldnt be allowed to have commerce with whom I please? I shouldnt be able to save/invest money? Most millionaires are people with a modest income.
The article doesn’t mention it, but it’s also difficult to bring their money with them due to strict transfer limits. China is shedding its parasite class, and the leeches are migrating to their natural environment.
What exactly is prompting the emigration though?
I don’t believe this:
Uncertainty over China’s economic trajectory and geopolitical tensions are top of mind for many Chinese millionaires
Well, you just need to read between the lines there.
uncertainty over China’s economic trajectory
Read: uncertainty over ability to continue exploiting labors using your accumulated surplus
geopolitical tensions…
Read: closing window of opportunities to freely move your accumulated surplus elsewhere
This is just like those immigrated nobles running from liberal revolutions in the past.
Being wealthy in the US/UK/Canada is so much better than being rich in China because the marginal advantage is substantially larger
In China? You still take the train. Transit is probably still faster than driving. Your food expenses don’t scale as fast because cheap food isn’t made of garbage. You already likely own a home. You probably come from a tier 1/2 city, so traveling domestically is cheap. Your kid still has to grind for gaokao.
In the US? You fly business. You drive around in your S Class. You can bribe infinite extracurriculars for your kid to get into a top university. You basically never have to interact with anyone in the lower 90% of incomes, and you don’t need to be THAT wealthy to do so.
Come to the Corporatocracy Haven! Milk it’s juicy population and be Free™.
