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China

China's "Naked" Businessmen: Hedging Their Bets Abroad

AUSTAR, SOUTH WEEKLY (China), CHINA TIMES (Taiwan)

Worldcrunch

BEIJING - For some time now there has been talk in China about “naked officials.” These Chinese Communist Party officials work in Mainland China while their families live abroad, out of harm’s way.

The idea is that, if need be, the (corrupt) official can escape the country without having to worry about leaving his wife and children behind. Along with their family, they have also their assets abroad. Hence, if there is a corruption investigation, the official is left “naked.”

China now also has an emerging group of “naked businessmen” too. They are rich men who stay in China to make money while sending their families and assets abroad, the China Times reports.

“Nobody knows exactly when it started, but we would always end up talking about emigration,” recalled Ma Hao for the South Weekly. He is talking about the topic of conversation at a private Shanghai club, which is frequented by China’s richest people. Ma Hao has visited his wife and son every two months since they went to settle in New Zealand five years ago.

China’s rapid economic growth has created a substantial class of wealthy people over the past decade, among which many are corrupt officials, but also private sector entrepreneurs. “Nowhere else on Earth can a business generate an annual profit of over 15%,” said Li Lan, a Wenzhou businessman whose parents emigrated to Canada.

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Naked in Shanghai. Photo: MikeBehnken

China Times reported that according to a recent study conducted jointly by the Hurun Research Institute and Bank of China, 60% of China’s richest, (i.e. with assets worth of more than 10 million RMB - $1.6 million) are either applying to emigrate or have already done so.

“Only half a million dollars is enough to obtain a Green Card through the EB-5 Immigrant Investor Program. That’s the price of a Beijing apartment. It’s worth it!” confided a man called Zhang.

Giving their children a better educational environment, safeguarding their wealth, and preparing for their retirement are the three major reasons given by these naked businessmen, according to South Weekly.

The wave of emigration among the elite as well as the country’s outflow of capital has alerted public opinion over the past couple of years, but “they are still focused on a crusade against the original sin of the rich class,” the report pointed out.

“The Chinese government is responsible for the public hatred towards the rich. On one hand, the Chinese Communist Party still believes that the rich are the exploiting class while on the other hand it implements a quasi-total capitalist economy. This has caused schizophrenia among the Chinese,” explained Yves, a businessman who works in Beijing while his wife and daughters reside in Paris.

According Austar, one of China’s biggest emigration agencies and also one of China’s most prosperous businesses in recent years, the six most popular destinations for China’s naked businessmen were Canada, United States, Australia, New Zealand, Singapore and the U.K.

In 2009, of all the investment visas in the U.S., 53% came from China. While in 2008, Canada approved more than 10,000 investment visas, of which 70% came from China.

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