By Andrew Browne
Aug. 15, 2014 12:41 p.m. ET
A recent report showed that 64% of
China's rich are either migrating overseas or have plans to leave the country.
Political scientist James To, who has written a book on the subject, tells the
WSJ's Deborah Kan how the Chinese government is using propaganda campaigns
abroad to ensure loyalty from overseas Chinese.
Even when the emperors did their
utmost to keep them at home, the Chinese ventured overseas in search of
knowledge, fortune and adventure. Manchu Qing rulers thought those who left
must be criminals or conspirators and once forced the entire coastal population
of southern China to move at least 10 miles inland.
But even that didn't put an end to
wanderlust. Sailing junks ferried merchants to Manila on monsoon winds to trade
silk and porcelain for silver. And in the 19th century, steamships carried
armies of "coolies" (as they were then called) to the mines and
plantations of the European empires.
Today, China's borders are wide
open. Almost anybody who wants a passport can get one. And Chinese nationals
are leaving in vast waves: Last year, more than 100 million outbound travelers
crossed the frontiers.
Most are tourists who come home. But
rapidly growing numbers are college students and the wealthy, and many of them
stay away for good. A survey by the Shanghai research firm Hurun Report shows
that 64% of China's rich—defined as those with assets of more than $1.6
million—are either emigrating or planning to.
To be sure, the departure of China's
brightest and best for study and work isn't a fresh phenomenon. China's
communist revolution was led, after all, by intellectuals schooled in Europe.
What's new is that they are planning to leave the country in its ascendancy.
More and more talented Chinese are looking at the upward trajectory of this
emerging superpower and deciding, nevertheless, that they're better off
elsewhere.
(Visitors to Tiananmen Square
struggle with Beijing's polluted air, Nov. 5, 2013. Agence France-Presse/Getty
Images)
The decision to go is often a mix of
push and pull. The elite are discovering that they can buy a comfortable
lifestyle at surprisingly affordable prices in places such as California and
the Australian Gold Coast, while no amount of money can purchase an escape in
China from the immense problems afflicting its urban society: pollution, food
safety, a broken education system. The new political era of President Xi
Jinping, meanwhile, has created as much anxiety as hope.
Another aspect of this massive population
outflow hasn't yet drawn much attention. Whatever their motives and wherever
they go, those who depart will be shadowed by the organs of the Leninist state
they've left behind. A sprawling bureaucracy—the Overseas Chinese Affairs
Office of the State Council—exists to ensure that distance from the motherland
doesn't dull their patriotism. Its goal is to safeguard loyalty to the
Communist Party.
This often sets up an awkward
dynamic between Chinese arrivals and the societies that take them in. While the
newcomers try to fit in, Beijing makes every effort to use them in its campaign
to project its political values, enhance its global image, harass its opponents
and promote the use of standard Mandarin Chinese over the dialects spoken in
Taiwan and Hong Kong.
Politics, though, isn't the most
important issue on the mind of Ms. Sun, a 34-year-old Beijing resident who's
bailing out. (She requested anonymity because she doesn't want publicity to
spoil her plans.) The main reason she's planning to pack up: Her 6-year-old
daughter is asthmatic, and Beijing's chronic pollution irritates the girl's
lungs. "Breathing freely is a basic requirement," she says. The girl
also has a talent for music, art and storytelling that Ms. Sun fears China's
test-driven schools won't nurture.
Recently, Ms. Sun flew to San
Francisco to shop for a school for her daughter, browse for property and handle
the paperwork for permanent U.S. residency. She insists that she's not leaving
China forever—a sentiment expressed by many on their way out who see a foreign
passport as an insurance policy in case things go badly wrong in China.
"I'm just giving my family
another option," she says.
A college professor, who insisted on
anonymity altogether ("Just call me an intellectual," he says), takes
a darker view of China's prospects as he prepares to emigrate to the U.S.,
joining his two children, who both have postgraduate degrees from U.S.
colleges.
Like many Chinese academics, the
professor has a business or two on the side, although he hardly looks the part
of an executive, unshaven and with crumpled pants riding 6 inches above his
open sandals. In China, he pronounces, "Once you get rich, they arrest
you."
That is an exaggeration, of course,
but there is a propensity for entrepreneurs who appear on lists of the richest
Chinese to end up in jail.
His real concern is that to get
ahead, he's had to make compromises with his principles (he doesn't say bribes,
but that is what he means). "I've been forced to prostitute myself,"
he says, and now he worries that it could all be snatched away. In China, a
weak, corrupt legal system may sometimes work in favor of entrepreneurs while
they're clawing their way up, cutting corners along the way, but it is almost
always a liability once they've made it.
First-generation businessmen—the
ones who powered China's economic rise—now dream of a secure retirement. That
means legal safety in places like the U.S. and Canada.
The professor is also a fan of U.S.
technology. One of his companies sells environmental equipment, and he's hoping
that by living in America, he'll find ways to enhance his products and develop
new ones—which he hopes to continue to sell in China, the biggest market. He
holds up his Apple iPhone.
"How many shirts do you think we Chinese have to export to buy one of
these phones?" he asks.
China, he concludes, is still
"a very backward country."
The flight of the rich recalls
similar outflows from Hong Kong before the 1997 handover of the then-British
colony to China and from Taiwan in an earlier period when its own future seemed
imperiled. In those cases, businesspeople parked their families in places like
Vancouver and Seattle and shuttled back and forth to Asia for business.
That is often the strategy in
today's China, which has entered an uncertain transition. The economy is off
the boil; property prices are sliding. Mr. Xi has amassed more power than any
Chinese leader since Deng Xiaoping and is using it to crack down on corrupt
officials while going after human rights lawyers, bloggers and civil society
activists. That is ridding China of the kind of individual its government
doesn't want but is also scaring away the creative types it needs.
Last year, the U.S. issued 6,895
visas to Chinese nationals under the EB-5 program, which allows foreigners to
live in America if they invest a minimum of $500,000. South Koreans, the next
largest group, got only 364 such visas. Canada this year closed down a similar
program that had been swamped by Chinese demand.
Some of the wealth sluicing out of
China is undoubtedly ill-gotten gains. The Chinese central bank estimates that
corrupt officials may have siphoned off as much as $123 billion since the
mid-1990s.
In his book "Restless Empire:
China and the World Since 1750," the historian Odd Arne Westad writes that
overseas Chinese "were, and are, the glue that holds China's relations
with the world together, in good times and bad."
That explains why Beijing takes an
intense pastoral interest in the Chinese diaspora. It has some 48 million
members—about double the number of Indians living outside their country—and
wherever they alight, they tend to rise to the top, be it Silicon Valley or the
high-tech corridors of Southeast Asia.
Beijing makes a crucial distinction
between ethnic Chinese who have acquired foreign nationality and those who
remain Chinese citizens. The latter category is officially called huaqiao—sojourners.
Together, they are viewed as an immensely valuable asset: the students as
ambassadors for China, the scientists, engineers, researchers and others as
conduits for technology and industrial know-how from the West to propel China's
economic modernization.
In 1989, when the Tiananmen Square
massacre triggered an outflow of traumatized students and shattered the Party's
image among overseas Chinese communities, the Overseas Chinese Affairs Office
kicked into high gear with a propaganda campaign to repair the damage. It
proved highly successful.
China
Real Time
The political scientist James Jiann
Hua To, the author of "Qiaowu: Extra-Territorial Policies for the
Overseas Chinese," says that the campaign "turned around the way most
overseas Chinese look at China." (Read a Q&A with James Jiann Hua To.)
The effort continues. It is subtle—a
hearts-and-minds campaign that works through overseas Chinese newspapers,
websites (digital "New Chinatowns," in propaganda-speak), schools,
youth groups and church organizations.
The results show up in
"patriotic" street activities. In 2008, for instance, well-organized
Chinese students guarded the Olympic torch as it went around the world ahead of
the Beijing Games, attracting raucous protests from Tibetan independence
activists and other hostile groups. The following year, Chinese students
disrupted the Melbourne Film Festival when it screened a movie about the life
of exiled Uighur leader Rebiya Kadeer, whom Beijing accuses of stirring up
separatist agitation in its Xinjiang region. Similar protesters dog the
footsteps around the world of the Dalai Lama, Tibet's exiled spiritual leader,
whom Beijing also accuses of "splittist" activities.
Foreigners sometimes have a hard
time understanding why Beijing expends so much effort countering threats, real
or imagined, from Chinese opponents overseas, including the banned Falun Gong
spiritual movement. But China's leaders are haunted by history. To an
extraordinary degree, the destiny of modern China has been shaped by the
Chinese who left. The overseas Chinese of Southeast Asia provided critical
support for Sun Yat-sen's 1911 revolution, which toppled the Qing.
The dynamic works the other way too.
When Deng needed money and expertise to unlock the entrepreneurial energies of
China in the early 1980s, he first tapped the mega-rich Chinese tycoons in Hong
Kong, Thailand and Malaysia, whose factories populated his Special Economic
Zones.
A Chinese tourist poses in front of
the Sydney Opera House in Australia, June 18, 2013. Reuters
But China's cross-border political
activities are creating unease. Consider Australia—one of the most popular
destinations for Chinese students, emigrants and tourists, and a country where
Mandarin Chinese is now the second-most widely spoken language after English.
"Chinese Australians are being
lectured, monitored, organized and policed in Australia on instruction from
Beijing as never before," wrote John Fitzgerald of Swinburne University of
Technology, one of the country's foremost China experts, in an article
published by the Asan Forum, a South Korean think tank.
In the U.S., a vigorous debate has
broken out in academic circles about the role on American campuses of Confucius
Institutes, which are sponsored by the Chinese government and offer
Mandarin-language classes, along with rosy cultural views of China. Critics say
these institutes threaten academic independence; supporters say they offer
valuable language training that would not otherwise be available. In June, the
American Association of University Professors stepped into the controversy and
recommended that universities "cease their involvement" with the
institutes unless they can gain "unilateral control" over them.
China must be exceedingly careful
not to leave too many fingerprints on its political activities offshore. For a start,
it has an official policy of noninterference in the internal affairs of other
countries. But it also puts established overseas Chinese communities at risk by
raising the issue of their national loyalties. That is particularly true in
Southeast Asia, where the Chinese of a previous era were often viewed with
suspicion as a communist fifth column.
Still, the sheer volume of China's
outbound travel these days, and its massive economic impact, gives it new
leverage. In the global market for high-end real estate, Chinese buying has
become a key driver of prices. According to the U.S. National Association of
Realtors, Chinese buyers snapped up homes worth $22 billion in the year ending
in March.
Australia called a parliamentary
inquiry to find out whether local households were being priced out of the
market by Chinese money. (The conclusion: not yet.)
Without fee-paying Chinese students,
many colleges in the postrecession Western world simply wouldn't be able to pay
the bills. Chinese students are by far the largest group of foreign students on
U.S. campuses, and their numbers jumped 21% last year from the year before—to
235,597, according to the Institute of International Education. Their numbers
are increasing at a similar pace in Australia. In England, there are now almost
as many Chinese students as British ones studying full-time for postgraduate
master's degrees.
Tourism is booming again thanks to
China. The Chinese have overtaken Americans to become the world's biggest
tourist spenders—and they're rapidly moving upmarket. Mei Zhang, the founder of
Beijing's high-end travel operator WildChina, offers family holidays to
destinations such as Kenya, Patagonia and Alaska at $10,000 per head. Chinese
are now the third-largest group of nationals landing in Antarctica, where
tourists zip around the ice floes in Zodiac inflatables to watch penguins.
The international hotel industry is
increasingly tailoring its service to Chinese tastes. Among the required extras
these days: teapots and toothbrushes. Russell Brice, the founder of the
expedition firm Himalayan Experience, says that he packs duck and chicken
feet—Chinese delicacies—along with the climbing gear for his Chinese clients.
"A few little things like that make it special," he says.
And the outflow has only just begun.
The Hong Kong-based brokerage firm CLSA forecasts that departures from China
will double to 200 million by 2020.
In education, the next big wave
coming from China is high schoolers. Rich parents are opting out of an
education system that prepares children to take high-stakes tests for college
entrance but neglects the creative side. Besides, once they've been through the
mill, the students have a tendency to kick back when they get to college.
Xie Li, a manager at a Beijing
telecommunications company, says that she tried to push her 16-year-old son to
go to high school overseas, but he couldn't bear to leave home so early. He's a
star pupil at the middle school attached to Beijing Normal University, which
First Lady Michelle Obama visited recently.
Still, the boy is being groomed for
college overseas and an international life. At 13, his parents packed him off
to spend six weeks with an American family in Virginia. They've taken family
breaks in exotic places like Tanzania. And now, to his mother's delight, he's
set a goal for himself to study chemistry at the Massachusetts Institute of
Technology.
Ms. Xie recognizes that he might
never come back but says, "His heart will always be with his family."
The Chinese government has no desire
to slow the flow of students. Its attitude is simple: Why not have the
Americans or Europeans train our brightest minds if they want to? President
Xi's own daughter went to Harvard.
As always with China, the numbers
awe. In his memoirs, Zbigniew Brzezinski, the former national security adviser,
recalls a meeting between President Jimmy Carter and Deng. Human rights were on
Mr. Carter's agenda, and he started needling the Chinese leader about Beijing's
tight emigration policies. "Fine. We'll let them go," Deng snapped.
"Are you prepared to accept 10 million?"
Not even Deng could have imagined
the human torrent his "open door" reforms would eventually unleash.
Try 100 million—and counting.
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