Chinese exodus is under way - but where is it heading?

Focus: Chinese millionaires are queuing to leave their homeland, pulling back the mask of the economic powerhouse, says Rupert Wright.

It is no good having economic growth without clean rivers, forests and fresh air. AFP

Many years ago, I heard a statistic that startled me so much that I still remember it: if the Chinese were to line up two-by-two and start walking out of the country along the Great Wall, they would never stop. They were so numerous that they would keep multiplying until the wall crumbled under their footsteps. I don't know if this is true or not, but it certainly sounded impressive.

It is probably still relevant today, but it can be modified somewhat. The people queuing up to leave China are millionaires, flush with cash from all sorts of nefarious or legitimate businesses, who have no desire to stay there to bring up their children.

This to me is a rather skewed nightmare. It recalls the sort of economic analysis that sprang from what happened in Russia in the 1990s at the height of the oligarchs' power and influence and compares it with what happened in the US at the time of Rockefeller, Carnegie and JP Morgan.

"We were all robber barons once," went the mantra.

The difference is that the Great Americans would never have dreamt of leaving the US. Most Russians have set up at least a temporary base in London, Dubai or Cyprus, but return to Mother Russia as often as possible. But many Chinese, it seems, have had enough of their own country and can't wait to pick up and flee.

Their long march, which is more likely to be a business-class flight somewhere, is a ghastly echo of Mao's long march, which ensured his and his ideology's success and condemned China to the excesses of the Cultural Revolution that persecuted and killed millions.

It is only 22 years since Tiananmen Square, when the Chinese government drove tanks over its own people. But those days are long forgotten, at least by most in the West. You cannot read an economist anywhere who is not gloating about the power of the yuan and China's impressive growth. China's form of capitalism, which has polluted all the major rivers, cut down many of the trees and made the air "crazy bad", to quote a former US diplomat, is now revered worldwide.

Well, not by me - and I suspect not by those Chinese who are preferring to take their bundles of yuan and invest them elsewhere. As many as half of Chinese millionaires are thinking about leaving the country, while nearly 15 per cent either have applied or are in the process of applying for emigration, according to a Hurun Research Institute and Bank of China report.

Their joint Private Banking White Paper 2011 talked to people with assets of more than 10 million yuan (Dh5.7m) in 18 cities to find out how China's cashed-up manage their money. The average asset holdings of the 980 surveyed are 60m yuan), with the average age of 42.

Where do China's millionaires want to live? The US is the top choice, followed closely by Canada, Singapore and Europe.

Half of the investors said they wanted to leave for better educational opportunities for their children. Others said they saw good investment opportunities elsewhere and were especially worried about the risks of remaining rich in China.

"We see too many entrepreneurs nowadays who are afraid that they would end up in prison for offending Chinese officials," Hu Xingdou, a scholar based in Beijing, told Ming Pao, a Hong Kong newspaper.

He thinks the lack of legal protection in many places has led to the emigration drive.

Where are these rich Chinese getting their money from? As elsewhere, property remains a good source of wealth, with 25 per cent becoming rich from property assets. A good number have also made money from manufacturing, a significantly higher proportion than elsewhere in the world.

And where are these rich property types investing? It won't surprise you to learn that it is in property, especially in London, if anecdotal evidence is to be trusted. A friend of mine who has a number of large developments in the British capital says the number of Chinese buying is growing daily.

"The wives love the shopping and the children go to school," he says. "I don't know what the men do. Maybe they go and play golf."

It is said by a number of leading educators that we should all teach our children Chinese, because soon we are going to be speaking it. On this evidence, I suggest we teach them rhyming slang.

But this confirms what I have been thinking for years, something most bean-counters have ignored or simply disregarded. It is no good having economic growth without clean rivers, forests and fresh air. It is no good being filthy rich without having anywhere to walk the dog, ride the horse or take the children to the beach.

Why did the French never have a huge diaspora like the Irish, Greeks or Italians? Because they all - by and large and with the exception of the Huguenots - enjoyed a decent standard of living and a lack of discrimination. France has the best rivers, forests and fresh air in Europe. I suppose the Chinese might go there, except that like the rest of us they can't speak the language and are dead scared of the French taxman. That may explain why you meet so many French people in this country.