China's Rich - Looking to Flee the mainland ?

China's Rich & Housing Fallout - How Rich was that again ?

Are China's Wealthy now looking to Flee the Mainland ?

===================================


There's an article in today's Asian WSJ called:

China Rich see Housing Fallout


"Many of China's richest citizens have seen their wealth shrink this year amid slowing growth and a weakening property market has shifted wealth patterns in the world's second largest economy.


Nearly 50% of China's top 1,000 wealthy citizens have faced financial losses this year, with the average wealth falling 9% to $860 million from a year earlier...."


What ? ! ?


I will repeat that:

"top 1,000 wealthy citizens... average wealth... $860 million"


That's 1,000 in China who are worth an average close to $1 Billion !


$860 Billion overall.


I wonder how much the Top 1,000 US citizens are worth


How true are those reports than many of the Chinese super-wealthy are looking to flee ?

in USD? I guess it can only be assumed that its in USD..

Thank for posting.


My initial reaction to the article is:


1. so what if China has 1000 people with an average net worth close to USD1 billion? Given the size of the population, the size of the economy and the pace of liberalisation over the last 30 years this should not be a surprise


2. the average is USD860 million - the average will be skewed upwards by he billionaires. There will not be 1000 people who are close to being USD billionaires. Confirmation is here - Forbes states that China's 400 richest have a combined net worth of USD459 billion:http://www.forbes.com/sites/russellflannery/2011/09/07/a-new-no-1-on-the-forbes-china-rich-list/


3. average wealth falling 9% last year is a non-story. The avergae wealth of HK's millionaires fell by much more according RBC Cap Gemini's latest wealth report. Given what has happened to the stock markets in China and export markets, the only surprise is that the decline is not larger.http://www.capgemini.com/insights-and-resources/by-publication/world-wealth-report-2012/

Here was a recent interview that Tom Friedman did with Charlie Rose


[media]http://www.youtube.com/watch?v=AsCBFv6f8Tc[/media]


Listen carefully at xx minutes in...



Whoops!


It's not in there - this is not the whole interview that I heard



In the missing part, Friedman talks about his recent trip to China.


He said, something like - I am paraphrasing:


"For the first time, I met people in China who want to get out of Dodge.


They want to take their money, and go someplace else.


They feel like they may have a harder time making money in the future,


and also begin to think the rich will be under threat in the country."



That's what I remember, but those are my words.


A pity it was in the Excerpt here, since I wanted to capture the actual words he used.



Question:


Is this sort of comment coming only from families that will lose power, in the coming power shift in China?


Or is it more widespread than that ?

MATH

====

TI:

1. so what if China has 1000 people with an average net worth close to USD1 billion? Given the size of the population, the size of the economy and the pace of liberalisation over the last 30 years this should not be a surprise



2. the average is USD860 million - the average will be skewed upwards by he billionaires. There will not be 1000 people who are close to being USD billionaires. Confirmation is here - Forbes states that China's 400 richest have a combined net worth of USD459 billion

---


Your math seems correct - but there's now a difference with Forbes


Asian WSJ : 1,000 = $860 Bn : $ 860 Mn each

Forbes---- : 0,400 = $459 Bn : $1,oXX Mn each

====

The Rest ? : 0,600 = $601 Bn : $1,000 Mn each


Something doesn't add up here. The "next 600" can hardly be worth more than the Richest 400. Can they?

Here are some other recent thoughts (for a chinese audience) from Tom Friedman


http://www.youtube.com/watch?v=lPUhrEBGlf4

I agree with some of it.


Does he really need to tell the Chinese "to be entrepreneurial at all times" ?

Seems like they do that naturally. If they can get away with passing out more fruit in return for a bigger tip, they will definitely do it. But their bosses amy not like it.



China needs a Different Dream than the American Dream ("green" & more respectful to the planet).



Right?


The world cannot afford another suburban nightmare


(I actually made that point in a Question I asked Tom F in HK about 3 years ago at an Asian Society luncheon - it seems he was listening, but it just took a few years to sink in!)

I think the maths is


USD860 Bn held by 1000 people - USD459 Bn held by the top 400 = USD 401 Bn held by the bottom 600 people

USD 401 Bn / 600 seriously rich people = USD 668 MM each


Still an awful lot of money.


Not sure if Forbes/Asian WSJ are estimating off the same assumptions and at the same time, but even so one can reach the unsurprising conclusion that there are a lot of very rich people in China (ex HK).


On the interview - given the nature of politics in China and the weakness of the rule of law, it would be extected that rich people would worry about losing what they have and look to ways to safeguard it. Whether it is as bad or worse than other countries where a war is being waged against the wealthy is obviously debatable but it is hardly surprising that people with money are more focused on preserving what they have rather than on investing in businesses that will grow and create jobs.


I certainly worry about perserving my modest nest egg (which would not even be a rounding error for these people) - I worry that inflation, taxation, social unrest, poor returns on my investments, other things including issues I have not even thought about will leave me unable to support either my family or myself when I am old(er).

Here's a SCMP article:

Optimism wavers amongst businesses in mainland


Manufacturers and retailers appear less assured about the future... as monetary easing has had little effect (so far.)


Some bright spots in retailing, services, and housing. Manufacturing is showing the biggest declines - and that is worrying since it has been the biggest jobs-engine for China. Unemployment is rising in the sector.