Sunday, October 15, 2006

Wealthy Chinese feel no safety

I talked with an assistant of a rich Chinese businessmen on Thursday. He told me his boss is going to finalize his business in Hong Kong at last as the city is more safe. I keep wondering what the businessman is afraid of right now?

Two guess: first, his money is illegal, but from what I know, his business is pretty legal without involving many politics and state-asset stuff. Second, he may be concerned on the safety of his millions of yuan asset, which may be under danger when the whole society lost balance. Seems the second answer is more close to the right answer.

President Hu Jintao has talked for several times on the social harmony. It is a right direction, but needs more solution. This is a target, but behind the social harmony, we should see people's scare. A shanghai financial controller of a state-owned group told me that there is so many bubble in the economy right now, and he wonders how the country will go in the future. His worry does reflect the concern of a lot of people, especially among wealthy class. They have seen their peers fall down and lose their wealth, even their lives, in one night; they also have also sensed the jealous group which hadn't made as much money as them. When Deng Xiaoping allowed a group of people to become richer, he may, or may not, predict that the conflict between the group and the others will be harder and harder.

Under those conflict, China is kind of wandering between the two groups: it could try to stand at the side of the still-poor people, or it could try to protect the already-rich people. It is a hard decision-making process, while no answer has been given out yet. That's why wealthy people ended up in the huge worries.

Glenn Hubbard, a senior economist working with U.S. Federal Reserve and the Dean of the Columbia Business School, said in a recent speech that China's fast growth is highly boosted by the enterpreneurship, rather than from the companding heights. I agreed partly: I agree the commading heights are not well structured to give all transparent policy, but some of them did try to protect the enterpreneurship. Hope more and more officials will be aware of this in the future.

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