From Bloomberg BusinessWeek - China: Stay or Go? -

 

Global Economics

China: For Many Expats, It's Not Worth It

Stay or go? That question has erupted in a public way among China’s large population of expatriate businessmen, entrepreneurs, journalists, and academics, who the public security bureau says number 220,000.

The debate started with an essay, “You’ll Never Be Chinese: It Is Time to Leave the Country I Loved,” by former magazine publisher Mark Kitto, a British 16-year resident of China. After his English-language magazine was seized by the government, Kitto retreated to Moganshan mountain outside Shanghai, where he and his Chinese wife have run a restaurant and guesthouse business for the last seven years. “Don’t you think,” asked Kitto in the August edition of Britain’s Prospect, “with all the growth and infrastructure, the material wealth, let alone saving the world like some kind of financial whiz James Bond, that China would be a happier and healthier country? I don’t think it is.” A second piece, titled “Why I’m Leaving China,” published July 25 by American tech writer and filmmaker Charlie Custer on his popular ChinaGeeks blog, made many of the same points.

The articles, widely e-mailed among expatriates, are being discussed on English and Chinese websites. “If you haven’t read Mark Kitto’s article on why he’s leaving China, do so now,” wrote Richard Burger, who has lived in Beijing for nearly four years, on his popular blog The Peking Duck, on Aug. 14. “There is talk of the U.S. ‘falling off a financial cliff,’ but right now I think China is closer to the edge of that cliff, and that it’s also a steeper cliff than ours.” The Chinese have reacted, too. In response to Custer’s piece, one outraged Chinese wrote on July 30: “Well, at first remember this, nobody forced you to come to China, [neither] your parents nor your God. Secondly, don’t try to change China when you are not a citizen of China. Thirdly and last, don’t spit on others when you leave. Thank you, have a nice flight, and please don’t come back!”

Custer, who with his wife left Beijing in late July for Maine, says, “I didn’t expect this to produce the emotional responses it seems to have. That’s in part because it is difficult to write an article like that without sounding critical of those who stay.” He had explained his decision by pointing to China’s problems with air pollution and food safety—and how they could affect his future children.

On the opposite side of the debate are those who basically say: Get over it. That was the message of “Foreigners in China Must Learn the Rules of the Road,” by Shaun Rein, the American founder of a market research firm based in Shanghai, who has lived in China for 12 years. “When crafting strategies, businesses need to do what the market demands and what the Party allows specifically for foreigners,” wrote Rein in a Sept. 14 essay on Businessweek.com (where he is a regular contributor). “Know your limitations and do not expect to operate with the same opportunities as Chinese. It is not an even playing field and never will be,” he wrote. “Don’t try to make it one, or you will end up banging your head against walls as Kitto did.” He called Kitto’s decision to go into media, a tightly controlled industry, a mistake. In retrospect, Kitto agrees.

It’s no secret that China has badly polluted air in its major cities. News reports highlight incidents of poisoned milk, adulterated pork, and even exploding watermelons. The rigid educational system is a turnoff for foreigners with families, while international schools charge tuitions that would bankrupt most.

The growing expat angst also reflects China’s often oppressive political system, and doubts about whether the ruling party can reform itself without social instability. “One day they are going to run out of money, and run out of soldiers and police” to deal with growing unrest, says Kitto in a call from Moganshan. (He’s leaving next year.) “China is always proud of everything being big. When the problem comes, it will be a big one, too.”

Disillusionment is a natural response to the diminishing opportunities of a slowing economy. “Up until 2006 you could come to China and get funded for something you wrote on the back of an envelope, myself included,” says Anne Stevenson-Yang, the American co-founder of J Capital Research, a Beijing-based equities analysis firm. After 21 years in China she has sold her house in Beijing and is looking to buy in New York City, in case things in China deteriorate rapidly.

Even many Chinese are growing uneasy. Members of China’s elite, including government officials, are seeking foreign residency for themselves or at least for their families, according to numerous reports in China’s state-owned media. The Chinese derisively call a functionary who secretly sends his next of kin abroad, sometimes with illegally obtained cash, a luo guan, or “naked official.” “China is a country run by a bureaucratic elite that doesn’t want your participation or views,” says Stevenson-Yang. “When you have the perception that things are getting better, you can accept that. When you don’t, you might as well leave.”

The bottom line: Foreigners in China are weary of the state dictating many business decisions. Education, food safety, and pollution are concerns as well.

With Bruce Einhorn

Roberts is Bloomberg Businessweek's Asia News Editor and China bureau chief.