There may be an odd pattern of traffic in the Pacific.
In a single direction – out of China – an exodus of “affluent” people is moving to places like Australia and the US, with an estimated 13,500 in 2023 alone. On the other hand, Beijing has a gradual stream of billionaires with names like Elon Musk and Bill Gates.
It is easy to see why the wealthy are fleeing China. President Xi Jinping is a real believer in communism, and the Chinese dictator is killing free enterprise there – one billionaire at a time.
China’s richest woman, Whitney Duan, was kidnapped from her Beijing apartment by security forces in 2017. Since then, literally lots of of Chinese billionaires and CEOs have been imprisoned or executed.
And it’s getting worse. In mid-2021, Xi announced shared prosperity, a drive to cut back income inequality. The Chinese know from sad experience how such political campaigns really work: the poor may or will not be exalted, but the wealthy will definitely be cut off.
Higher to maneuver to Sydney – and even San Francisco – than face such a fate.
But why have Western potentates continued to make pilgrimages to China in the previous few weeks?
To make certain, that is nothing latest. For greater than three many years, Communist Party officials have tempted Western CEOs with visions of customer lines long enough to span the globe.
Only it wasn’t true. Even before the advent of the one-child policy, the Chinese population was at all times limited.
Equally false was the notion that China was an enormous untapped marketplace for American manufacturers. As soon as American firms opened factories in China, their profit margins disappeared. State-subsidized rivals began stealing their technology, and corrupt officials began demanding payment.
Profitable foreign firms faced one other hurdle: tips on how to get money out of China. The Chinese Communist Party has at all times insisted that the profits made in China stay in China — and implemented strict capital controls to maintain them there.
“Don’t let oily water get on other people’s fields,” as a Chinese proverb says.
So tell me again, are you able to tell me why Elon Musk just went to Beijing? In any case, state-subsidized rivals have been copying his designs, stealing his software and talking about his electric vehicles since he opened his Tesla Gigafactory in Shanghai in 2019. Beijing even temporarily halted its expansion plans earlier this yr due to Musk’s Ukraine use of Starlink’s satellite company.
Nonetheless, in April Musk’s Tesla announced the construction of a latest battery factory, also in Shanghai. Since it seems that considered one of the leading entrepreneurs of our time has found a partial workaround. The Gigafactory is Tesla’s export manufacturing hub, meaning most of the company’s profits are generated (and remain) outside of China.
Nonetheless, additionally it is clear that Musk, like all capitalists who’ve invested in China, knows that investments can evaporate overnight. Subsequently, he often praised the country’s leadership and even called for Taiwan to develop into a “special administrative zone” of China.
Musk is definitely not alone in his pandering to the CCP. A free speech advocate, though he could also be, understands that China is playing by different rules.
Jamie Dimon, head of JPMorgan Chase, seems to grasp this as well. The biggest US bank has long helped finance China’s rise as a world power. Dimon was in Shanghai last month to proceed his efforts.
In what will need to have been music to Beijing’s ears, Dimon argued against the potential “separation” of the interdependent economies of China and the United States. As a substitute, he called for a concentrate on what he called “risk reduction” in the relationship.
“You possibly can’t fix this stuff by sitting across the Pacific and yelling at one another, so I hope we get really engaged,” Dimon said.
But make no mistake: when Dimon talks about “commitment” and “relinquishing risk,” he does not imply changing Beijing’s aggressively hostile US policy. Somewhat, he wants the US to make concessions to China, including on Taiwan.
Then there’s Bill Gates, who spent the last week cuddling as much as China’s dictator.
Now I understand Elon Musk desires to sell Tesla and Jamie Dimon desires to sell stocks and bonds, but what on earth was Bill Gates doing in China? He doesn’t generate income because his software has been mostly banned there. Indeed, he left the poorer country, donating $50 million to a medical research program there – while achieving little greater than a spot at Xi’s seventieth party.
All these political pilgrims to Beijing understand that the CCP leaders are making declarations of free trade while practicing the opposite. They understand that China is willing to speculate, but they don’t allow investors to repatriate their profits. They understand that Chinese firms arrange stores anywhere in the world, but foreign firms face a difficult existence in totalitarian China.
But most of those trapped capitalists are too deep to back out now – so long as the CCP allows them to proceed to profit.
Meanwhile, these Chinese multi-millionaires moving to democratic countries are also not disconnecting. Most of them still have factories in China that produce goods for export. But they “reduce risk” in a really practical way by placing a minimum of a few of their wealth – and family members – out of the reach of greedy communist officials.
America should learn a lesson from them and put its entire country out of reach of those self same officials by hanging up now.
Meanwhile, any billionaire who makes a fortune in America after which supports a totalitarian dictatorship should seriously reconsider.
And cancel his next flight to Beijing.
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Steven W. Mosher is president of the Population Research Institute and creator of Bully of Asia: Why China’s Dream is the Latest Threat to World Order.