Harvard professor and China expert Roderick MacFarquhar had an insightful op-ed in today’s New York Times, where he talks about why the Chinese elite are stashing their assets overseas and sending their children abroad for schooling. It’s not pure greed, he says, but fear.
China’s Communist leaders cling to Deng Xiaoping’s belief that their continuance in power will depend on economic progress. But even in China, a mandate based on competence can crumble in hard times. So globalizing one’s assets — transferring money and educating one’s children overseas — makes sense as a hedge against risk. (At least $120 billion has been illegally transferred abroad since the mid-1990s, according to one official estimate.)
Such massive asset transfers are happening not just from China, but other places as well, such as Russia and the resource-rich states of Africa, where the acquisitiveness of political leaders have earned some global notoriety. But is it really just fear that motivates the accumulation and transfer of wealth? Is it also not the sheer enjoyment of what money can buy? Read the rest of this entry »