To the President of the People’s Republic of China Xi Jinping, it seems that it is difficult for him to find a balance point. She wants China to be a superpower, but her authoritarian impulses and those of the Communist Party are isolating her from the world. The wall with which he surrounded the country prevents the entry of ideas from abroad that are vital for the development of their companies. Due to the Zero Covid policy, Chinese academics stopped participating in conferences and seminars abroad; His executives travel very little, making it difficult to close deals and the number of European expatriates in China has been cut in half.
The immediate future is not bright: drought has brought the level of the Yangtze River to its lowest level in more than a century and a half in a country that has almost 20% of the population, but only 6% of freshwater resources. of the planet. In addition, for 90% of its energy production it requires intensive use of water.
Those who observe the panorama with distrust are the mega entrepreneurs and the Chinese tycoons. They understood before anyone else that an increasingly state-run economy, prioritizing politics and national security over growth, can’t get very far.
The consequence is logical, as they have the possibility to do it, they are leaving the country. The examples accumulate almost daily. In September 2022, the couple Pan Shiyi and Zhang Xin, two of China’s best-known businessmen, resigned as president and CEO, respectively, of their real estate empire, Soho China. Jack Ma, co-founder of Alibaba, resigned from the leadership of the company. Colin Huang, founder of Pinduoduo, a direct competitor of Alibaba, stepped down as president, as did Zhang Yiming, founder of TikTok’s parent company ByteDance.
zhou hanga renowned tech entrepreneur, moved from Shanghai to Vancouver, British Columbia, from where he made harsh statements against the Xi Jinping regime.
By reproaching from abroad, he was spared an 18-year prison sentence like the one suffered by Ren Zhiqiang, another big businessman, for criticizing Xi Jinping’s management on Chinese soil.
The investment migration consultancy Henley & Partners It is estimated that this conglomerate of millionaires would end up taking some USD 48,000 million out of the country.
It is clear that Beijing will not keep its arms crossed in the face of this diaspora. In fact, several immigration lawyers say that transfers have become more difficult in recent months as passport processing times have increased. Added to this are the new bureaucratic obstacles imposed by financial control entities to make it difficult for foreign currency to flow abroad.
Companies are also leaving China. Major companies such as Apple, Samsung, HP and Dell are planning their moves to Malaysia, Indonesia, Thailand and Vietnam captivated by labor that is several times cheaper than in China.
Another issue of concern is the decline in the birth rate. The figures released by the National Statistics Office indicate that in 2021 there were 10.6 million births, 1.4 million less than the previous year.
The last time China’s population declined was in 1960, when the country faced the worst famine in its modern history, caused by Mao Zedong’s agricultural policy, dubbed the Great Leap Forward.
In 2010, 9% of the population was 65 or older. In 2020, the proportion had grown to 13.5%. During the same period, the proportion of people between the ages of 15 and 59 decreased by 6.7%.
An aging citizenry will immediately lead to a reduction in the manpower essential for the economic development of the country.
In 2016, Beijing backed away from a decades-long one-child policy designed to limit its population growth. Since then, couples have been allowed to have a second child, a limit that was extended to three in 2022.
Today changed the speech completely. The Chinese government tells its citizens, especially women, that “having more children is a patriotic duty.” Other incentives include more state-funded childcare centers and greater protection for women against discrimination in the workplace.
While China’s median age is 36, Vietnam’s is 30.7. Its urban workforce has plenty of room to grow. Seven out of ten Vietnamese live in the countryside, about the same as in India, and compared to just 44% in China. The pool of rural workers should help cushion wage pressures, giving Vietnam time to build labour-intensive industries, a necessity for a nation of nearly 100 million people.
* By Agustín Barletti is the author of the book “The Hunger of the Dragon. China’s plan to eat the world.
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by Agustin Barletti*
