Comments on: China's one-percenters make ready to take the money and run http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html Brain candy for Happy Mutants Thu, 23 May 2013 03:37:00 +0000 hourly 1 http://wordpress.org/?v=3.4.1 By: J Ascher http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1517806 J Ascher Sat, 25 Aug 2012 01:06:00 +0000 http://boingboing.net/?p=177764#comment-1517806  The actual number would be around 12 million since China has about 1.2 billion people in  it.  The actual number would be around 12 million since China has about 1.2 billion people in  it.

]]> By: J Ascher http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1517804 J Ascher Sat, 25 Aug 2012 01:03:00 +0000 http://boingboing.net/?p=177764#comment-1517804  I suppose the Chinese government could put a limit of say one million yuan per year on out-of-country transfers. Since China is centrally-controlled, it should be fairly easy to enforce this. Of course, corruption in the hinter and not-so hinterlands would be problematic.  I suppose the Chinese government could put a limit of say one million yuan per year on out-of-country transfers. Since China is centrally-controlled, it should be fairly easy to enforce this.

Of course, corruption in the hinter and not-so hinterlands would be problematic.

]]> By: hakuin http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1517158 hakuin Fri, 24 Aug 2012 16:39:00 +0000 http://boingboing.net/?p=177764#comment-1517158 so, one dirty bomb in Hong Kong would topple China. so, one dirty bomb in Hong Kong would topple China.

]]> By: TheMudshark http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516785 TheMudshark Fri, 24 Aug 2012 09:56:00 +0000 http://boingboing.net/?p=177764#comment-1516785 No problem – just tailor all legislation and tax regulation so that no rich person ever has to contribute anything to society. If every country in the world does it, none of them will loose their precious rich folk and everybody´s happy, right? No problem – just tailor all legislation and tax regulation so that no rich person ever has to contribute anything to society. If every country in the world does it, none of them will loose their precious rich folk and everybody´s happy, right?

]]> By: aeon http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516757 aeon Fri, 24 Aug 2012 07:34:00 +0000 http://boingboing.net/?p=177764#comment-1516757 Lets hope China works out a way of keeping their rich kleptocrats and their money in China, it's a win-win situation if they do. If they emigrate it's a loss to both sides — China loses their money and the rest of the world gains a group of crass, ill-mannered, loud, self-centred, uncultured  idiots who are a detriment to the countries they end up in. Trust me, I lived there and know just what China's nouveaux riche are like.  Lets hope China works out a way of keeping their rich kleptocrats and their money in China, it’s a win-win situation if they do. If they emigrate it’s a loss to both sides — China loses their money and the rest of the world gains a group of crass, ill-mannered, loud, self-centred, uncultured  idiots who are a detriment to the countries they end up in. Trust me, I lived there and know just what China’s nouveaux riche are like. 

]]> By: ocker3 http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516756 ocker3 Fri, 24 Aug 2012 07:33:00 +0000 http://boingboing.net/?p=177764#comment-1516756  Good Lord that scares me!  Good Lord that scares me!

]]> By: atimoshenko http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516749 atimoshenko Fri, 24 Aug 2012 07:17:00 +0000 http://boingboing.net/?p=177764#comment-1516749 I'm not sure why this would be a problem for China. Financial wealth is not productive capital – it is the promise to hand over productive capital if asked for. Moving financial capital does not move barrels of oil, roads, or factories. Indeed, money is a token signifying wealth created (though not necessarily by the person who managed to acquire the money) but not yet consumed, so running away with a bunch of money leaves actual assets the same but makes the claims on them more tenuous. Now, in an economy free from government interference, those promises to reward previously produced wealth and had over productive capital are still rather powerful. In China's case, however, the government (in matters critical to its own political survival) can easily dispossess any 'escapees' on an ad hoc basis. Not enough liquidity? Print more cash and send everyone a cheque. I’m not sure why this would be a problem for China. Financial wealth is not productive capital – it is the promise to hand over productive capital if asked for. Moving financial capital does not move barrels of oil, roads, or factories. Indeed, money is a token signifying wealth created (though not necessarily by the person who managed to acquire the money) but not yet consumed, so running away with a bunch of money leaves actual assets the same but makes the claims on them more tenuous. Now, in an economy free from government interference, those promises to reward previously produced wealth and had over productive capital are still rather powerful. In China’s case, however, the government (in matters critical to its own political survival) can easily dispossess any ‘escapees’ on an ad hoc basis. Not enough liquidity? Print more cash and send everyone a cheque.

]]> By: Jonathan Roberts http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516701 Jonathan Roberts Fri, 24 Aug 2012 04:22:00 +0000 http://boingboing.net/?p=177764#comment-1516701 Joining the party is a good way to get ahead in your company or get help with university, so it makes sense to many people who have no politics or who are even critical of the system. Joining the party is a good way to get ahead in your company or get help with university, so it makes sense to many people who have no politics or who are even critical of the system.

]]> By: xiagang http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516599 xiagang Fri, 24 Aug 2012 01:31:00 +0000 http://boingboing.net/?p=177764#comment-1516599 Back in the late 90s and early 2000s, it was common to hear financial types talk about all that FDI flowing into China. By 2003/4 it was hovering somewhere between US$50-70 billion (I forget the exact years and amounts, but this is in the ball park). Trouble is, that a lot of direct investment from offshore was just mainland money round tripping. Wealthy mainlanders took their money out of China (illegally), washed it in Hong Kong, and invested it into China (where as "foreign investors" they received tax breaks, free or cheap land to build factories, export assistance, etc). It was one of the greatest swindles of all time. Some people who looked at this closely suggest up to 50% of all money invested by foreigners in China was actually Chinese money round tripping.  In those days, these guys made a lot of money. Exports were booming, profits were still fairly good, and everyone was laughing all the way to the bank. Today, it's not the case. So instead of round tripping, the big money is taking a one-way trip. The first port of call is Hong Kong. Want to know why Hong Kong is booming when the EU and US are broke? Take a look at the money pouring into this place (I live in Hong Kong) from the  mainland. Talk to Hong Kong locals about property prices (sky rocketing on the back of crazy prices paid by mainlanders who just want to park their money somewhere safe). And once that money is here in Hong Kong, well... it can be transferred anywhere you like. I have seen bus-loads of mainlanders taken to luxury residential buildings still under construction and people buying two flats for US$4.5 million with cash (not literally a suitcase of cash, but transfer of cash without the requirement for a bank loan).  I know a lot of wealthy people in China. Almost without exception, they are putting some of their money into investments in Hong Kong. And once the money is in Hong Kong, the world is their oyster.  BTW: taking money out of China is tough business. The government syphons off a considerable proportion if you do it legally via bank transfers. People prefer to use underground methods (some as simple as walking across the frontier at Luo Hu (the border point between Hong Kong and China) with large amounts of money in a suitcase.  Others transfer larger amounts of cash by numerous other methods. Sometimes people are caught and exposed, but Hong Kong is awash with black money.  The other popular destination for mainland money is Macau and the casinos. Vegas doesn't come close to Macau's turnover (I can't recall the figure, but I guess Macau has a turnover 3-4 times that of Vegas), and most of the money in Macau comes across the border (a short walk).  However, the Chinese economy won't tank because rich mainlanders take their money out. It will tank because of corruption. Taking money out of the country is just a symptom of corruption. You get rich in China through corruption, but once you have a lot of money you want to get it as far away from this corruption as possible.  But Shih is basically right.  Back in the late 90s and early 2000s, it was common to hear financial types talk about all that FDI flowing into China. By 2003/4 it was hovering somewhere between US$50-70 billion (I forget the exact years and amounts, but this is in the ball park). Trouble is, that a lot of direct investment from offshore was just mainland money round tripping. Wealthy mainlanders took their money out of China (illegally), washed it in Hong Kong, and invested it into China (where as “foreign investors” they received tax breaks, free or cheap land to build factories, export assistance, etc). It was one of the greatest swindles of all time. Some people who looked at this closely suggest up to 50% of all money invested by foreigners in China was actually Chinese money round tripping. 

In those days, these guys made a lot of money. Exports were booming, profits were still fairly good, and everyone was laughing all the way to the bank. Today, it’s not the case. So instead of round tripping, the big money is taking a one-way trip. The first port of call is Hong Kong. Want to know why Hong Kong is booming when the EU and US are broke? Take a look at the money pouring into this place (I live in Hong Kong) from the  mainland. Talk to Hong Kong locals about property prices (sky rocketing on the back of crazy prices paid by mainlanders who just want to park their money somewhere safe). And once that money is here in Hong Kong, well… it can be transferred anywhere you like. I have seen bus-loads of mainlanders taken to luxury residential buildings still under construction and people buying two flats for US$4.5 million with cash (not literally a suitcase of cash, but transfer of cash without the requirement for a bank loan). 

I know a lot of wealthy people in China. Almost without exception, they are putting some of their money into investments in Hong Kong. And once the money is in Hong Kong, the world is their oyster. 

BTW: taking money out of China is tough business. The government syphons off a considerable proportion if you do it legally via bank transfers. People prefer to use underground methods (some as simple as walking across the frontier at Luo Hu (the border point between Hong Kong and China) with large amounts of money in a suitcase.  Others transfer larger amounts of cash by numerous other methods. Sometimes people are caught and exposed, but Hong Kong is awash with black money. 

The other popular destination for mainland money is Macau and the casinos. Vegas doesn’t come close to Macau’s turnover (I can’t recall the figure, but I guess Macau has a turnover 3-4 times that of Vegas), and most of the money in Macau comes across the border (a short walk). 

However, the Chinese economy won’t tank because rich mainlanders take their money out. It will tank because of corruption. Taking money out of the country is just a symptom of corruption. You get rich in China through corruption, but once you have a lot of money you want to get it as far away from this corruption as possible. 

But Shih is basically right. 

]]> By: xiagang http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516579 xiagang Fri, 24 Aug 2012 01:09:00 +0000 http://boingboing.net/?p=177764#comment-1516579 Hong Kong.  Hong Kong. 

]]> By: Layne http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516418 Layne Thu, 23 Aug 2012 22:16:00 +0000 http://boingboing.net/?p=177764#comment-1516418 Yep - Foreign Times did an article on just how badly the Chinese system is riddled with corruption and cronyism.  When govt has a say so in everything you do - right down to reproducing - the people running it tend to get conveniently showered with gifts from people wanting to sway their decisions.  Ugh.  I imagine a large subset of these wealthy people are bureaucrats who'd need to hoof it pretty quickly when their scam gets exposed.  Yep – Foreign Times did an article on just how badly the Chinese system is riddled with corruption and cronyism. 
When govt has a say so in everything you do – right down to reproducing – the people running it tend to get conveniently showered with gifts from people wanting to sway their decisions.  Ugh. 

I imagine a large subset of these wealthy people are bureaucrats who’d need to hoof it pretty quickly when their scam gets exposed. 

]]> By: Antinous / Moderator http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516381 Antinous / Moderator Thu, 23 Aug 2012 21:51:00 +0000 http://boingboing.net/?p=177764#comment-1516381 How much "representing" goes on in the House of Representatives? How much “representing” goes on in the House of Representatives?

]]> By: Boundegar http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516284 Boundegar Thu, 23 Aug 2012 19:54:00 +0000 http://boingboing.net/?p=177764#comment-1516284 Oh hell.  What if they fled back into the womb, and then Paul  Ryan got them US Citizenship? Oh hell.  What if they fled back into the womb, and then Paul  Ryan got them US Citizenship?

]]> By: wysinwyg http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516240 wysinwyg Thu, 23 Aug 2012 19:18:00 +0000 http://boingboing.net/?p=177764#comment-1516240  Related: xkcd's last <a href="http://what-if.xkcd.com/8/" rel="nofollow">"What if"</a>  Related: xkcd’s last “What if”

]]> By: Funk Daddy http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516223 Funk Daddy Thu, 23 Aug 2012 19:09:00 +0000 http://boingboing.net/?p=177764#comment-1516223 uh we'd be going back in time and getting younger and shit like when superman did that thing, my question is where the trillion 1% will be when time reverses, same thing I asked superman, he said "stfu kid" and flipped me the bird  uh we’d be going back in time and getting younger and shit like when superman did that thing, my question is where the trillion 1% will be when time reverses, same thing I asked superman, he said “stfu kid” and flipped me the bird 

]]> By: Boundegar http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516197 Boundegar Thu, 23 Aug 2012 18:52:00 +0000 http://boingboing.net/?p=177764#comment-1516197 The thing is, we throw around numbers like one percent, but one percent of China would be over a trillion people.  If even one percent of them fled, it could reverse the rotation of the earth.  And then where would we be? The thing is, we throw around numbers like one percent, but one percent of China would be over a trillion people.  If even one percent of them fled, it could reverse the rotation of the earth.  And then where would we be?

]]> By: Funk Daddy http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516182 Funk Daddy Thu, 23 Aug 2012 18:42:00 +0000 http://boingboing.net/?p=177764#comment-1516182 That's what I mean, if they did that the people of Dubai would be the ones struggling to fit right in. There's like 5 million people in Dubai, it'd be a wild ride to drop 13 million plus chinese immigrants, all wealthy, even over a decade. That’s what I mean, if they did that the people of Dubai would be the ones struggling to fit right in. There’s like 5 million people in Dubai, it’d be a wild ride to drop 13 million plus chinese immigrants, all wealthy, even over a decade.

]]> By: dioptase http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516162 dioptase Thu, 23 Aug 2012 18:32:00 +0000 http://boingboing.net/?p=177764#comment-1516162 Couple of fun facts: - Income inequality has been higher for several years in China than it was during the revolution.  (I wish I could find the source.  Sorry) -  Government officials in China are extraordinarily wealthy.  http://www.bloomberg.com/news/2012-02-26/china-s-billionaire-lawmakers-make-u-s-peers-look-like-paupers.html Couple of fun facts:

- Income inequality has been higher for several years in China than it was during the revolution.  (I wish I could find the source.  Sorry)

-  Government officials in China are extraordinarily wealthy.  http://www.bloomberg.com/news/2012-02-26/china-s-billionaire-lawmakers-make-u-s-peers-look-like-paupers.html

]]> By: jandrese http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516158 jandrese Thu, 23 Aug 2012 18:30:00 +0000 http://boingboing.net/?p=177764#comment-1516158 Or they could just move to Dubai.  Seems like they would fit right in.  Or they could just move to Dubai.  Seems like they would fit right in. 

]]> By: ChicagoD http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516151 ChicagoD Thu, 23 Aug 2012 18:28:00 +0000 http://boingboing.net/?p=177764#comment-1516151 Well, it seems like there are a lot more members of the Communist Party than there are communists, so to speak. Well, it seems like there are a lot more members of the Communist Party than there are communists, so to speak.

]]> By: dioptase http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516131 dioptase Thu, 23 Aug 2012 18:19:00 +0000 http://boingboing.net/?p=177764#comment-1516131 People aren't ditching dollars.  One bit of proof:  T-Bills have an effective negative rate.  People are paying Uncle Sam to hold their money.  Why?  It's the least crappy option. People aren’t ditching dollars.  One bit of proof:  T-Bills have an effective negative rate.  People are paying Uncle Sam to hold their money.  Why?  It’s the least crappy option.

]]> By: Navin_Johnson http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516122 Navin_Johnson Thu, 23 Aug 2012 18:13:00 +0000 http://boingboing.net/?p=177764#comment-1516122  Singapore?  Sea Palaces?  Singapore?  Sea Palaces?

]]> By: ChicagoD http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516114 ChicagoD Thu, 23 Aug 2012 18:07:00 +0000 http://boingboing.net/?p=177764#comment-1516114 Vegas, baby! Vegas, baby!

]]> By: ZA_SF http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516111 ZA_SF Thu, 23 Aug 2012 18:06:00 +0000 http://boingboing.net/?p=177764#comment-1516111 I'm just amused the antiquities train has essentially never ended. http://www.chinaheritagequarterly.org/features.php?searchterm=004_palacemuseumprehistory.inc&issue=004 I’m just amused the antiquities train has essentially never ended. http://www.chinaheritagequarterly.org/features.php?searchterm=004_palacemuseumprehistory.inc&issue=004

]]> By: dioptase http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516112 dioptase Thu, 23 Aug 2012 18:06:00 +0000 http://boingboing.net/?p=177764#comment-1516112 Nope.  In fact, when I'm there, I'm often subjected to long tirades about how awful communists are.  In public. People don't say much about capitalism. They are too focused on making money. In short, there is a Communist Party, but there are very few communists.  (ok, even if only 1 in 100, 1% of 1.3 billion might technically be a shitload of communists) Nope.  In fact, when I’m there, I’m often subjected to long tirades about how awful communists are.  In public. People don’t say much about capitalism. They are too focused on making money.

In short, there is a Communist Party, but there are very few communists.  (ok, even if only 1 in 100, 1% of 1.3 billion might technically be a shitload of communists)

]]> By: Mark Ridley http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516105 Mark Ridley Thu, 23 Aug 2012 18:03:00 +0000 http://boingboing.net/?p=177764#comment-1516105 I presume they will come and live in London and make the house prices even effing higher. I presume they will come and live in London and make the house prices even effing higher.

]]> By: Charles Céleste Hutchins http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516096 Charles Céleste Hutchins Thu, 23 Aug 2012 17:59:00 +0000 http://boingboing.net/?p=177764#comment-1516096 Where will all the capital fly to? Every industrialized country keeps hearing about capital flight, but this requires a stable target currency. If everybody is ditching dollars, euros, yen, yuan, what are they going to buy?  Of if they're not converting the currency, just stuffing it in foreign banks, presumably those pay some kind of interest and therefore do loans and stuff. Where are they? Where will all the capital fly to? Every industrialized country keeps hearing about capital flight, but this requires a stable target currency. If everybody is ditching dollars, euros, yen, yuan, what are they going to buy?  Of if they’re not converting the currency, just stuffing it in foreign banks, presumably those pay some kind of interest and therefore do loans and stuff. Where are they?

]]> By: Funk Daddy http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516074 Funk Daddy Thu, 23 Aug 2012 17:50:00 +0000 http://boingboing.net/?p=177764#comment-1516074 So that would be 13 million people give or take probably more including entourage and relations. I hope they all move to the same city outside China o r build a new one just for them, that'd be fucked up and make for some excellent documentaries and movies. So that would be 13 million people give or take probably more including entourage and relations. I hope they all move to the same city outside China o r build a new one just for them, that’d be fucked up and make for some excellent documentaries and movies.

]]> By: tomrigid http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516061 tomrigid Thu, 23 Aug 2012 17:41:00 +0000 http://boingboing.net/?p=177764#comment-1516061 This sort of volatility is the price of China's rapid modernization. If their central planners are able and willing to extend the schedule of current investment they'll be able to reduce the near-term risk posed by this sort of capital flight. Some will see that as a claw-back, and flight will occur, but if they are well-guided, cautious, and committed to their program then it should be affordable. More importantly, this gives them (and us, outside of China) the best chance of avoiding an auto-catalytic global meltdown, which is nice. This sort of volatility is the price of China’s rapid modernization. If their central planners are able and willing to extend the schedule of current investment they’ll be able to reduce the near-term risk posed by this sort of capital flight. Some will see that as a claw-back, and flight will occur, but if they are well-guided, cautious, and committed to their program then it should be affordable. More importantly, this gives them (and us, outside of China) the best chance of avoiding an auto-catalytic global meltdown, which is nice.

]]> By: spejic http://boingboing.net/2012/08/23/chinas-one-percenters-make-r.html#comment-1516060 spejic Thu, 23 Aug 2012 17:39:00 +0000 http://boingboing.net/?p=177764#comment-1516060 It seem an inevitable end to the creation of a class with the utterly uncontrolled and uncontrollable power to destroy everything and no responsibility to or respect for their home country. It seem an inevitable end to the creation of a class with the utterly uncontrolled and uncontrollable power to destroy everything and no responsibility to or respect for their home country.

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