One of the most frequently asked questions that readers email me is a variation of the title, should I move from my relatively comfortable First World domicile and venture forth to China?
My short answer: No.
The big question after that is, why should you? What is the motivation for moving elsewhere? What are the opportunity costs of making such a decision?
I think advising young people to leave the US for a long period of time is probably not a good career move. I know this first hand. Sure as a “gap year” or exchange student program might be <insert cliché> culturally useful in opening up your eyes to how other cultures work, but anything more than a couple years and you are going to get left behind skill wise in the US (or wherever you hail from).
You might have recently seen Shanghai Calling and thought, gee that foreign world is fantabulous. And to be totally honest: on the surface it truly is a romantic bohemian siren call. But what they didn’t show you is that by-and-large, you might as well be unemployed because your skill set is probably going to get rusty.
Litmus Test 1: Division of Labor
If your goal is to make yourself (and as a consequence, the world) wealthier, healthier and just plain richer — take action in a region you have a comparative advantage. Aside from language skills, I doubt the typical twentysomething libertarian has more than a handful of productive capabilities that cannot already be found in China. In fact, the WSJ had a piece earlier this year about just this, how the expat is an endangered species for this exact reason. And there is plenty of anecdotal evidence suggesting this flight-back-to-the-OECD trend may continue (see this excellent essay from Prospect magazine).
This is not to say that China (and other developing countries) no longer needs foreign experts. But are you really a foreign expert? Write down a list of things you can do comparatively better than your Chinese counterpart. What is your marginal productive value and what is the typical salary an expat with your skillset makes in China?
Unfortunately I think part of the draw to China is a “grass is greener” kind of syndrome. Yet this is naïve. There will always be a mythical nirvana du jour. Just as Dubai was 10 years ago, Eastern Europe was 20 years ago, Japan was 30 years ago and even the Soviet Union was… 80 years ago. Ad infinitum.
Litmus Test 2.1: Libertopia
I cannot tell you how many libertarian authors in the blogosphere are absolutely gaga over the supposed China miracle. Heck, I am most certainly guilty of the seen and unseen back in 2008 (see here and here). But after moving out here many moons ago, I have since publicly admitted that I was completely and utterly wrong (off the top of my head there have been only a handful of libertarianesque financial analysts that have been consistently bearish [realistic] on China over the years: Mike Shedlock, Marc Faber, Doug Casey, Mark DeWeaver).
This region is not a bastion of libertarianism. And it will probably never be.
Let me count the ways it is not
Remember, this section is to show how the US – with all of its quirks, faults and rights abuses – still has more libertarian freedoms than China.
During the recent China versus Philippine’s Scarborough shoal dispute, the PRC restricted tourist flights to the Philippines, restricted the importation of foodstuffs (e.g. bananas) from the Philippines and many Chinese policy makers echoed jingoistic comments nearly as bad as these anti-Japanese comments (it’s okay, the political elites hate taxpayers too).
I know it is hard for some to imagine, but yes, the birthplace of The Great Leap Forward and Cultural Revolution still has malicious assholes too.
Who knows how many people died in these upheavals or are being killed here today, certainly don’t believe the numbers the PRC publish anymore than someone should trust the US official tabulations. There are dozens of labor camps no one really talks about, who knows how many are killed there (or disappeared).
In fact, one lady was finally released from a labor camp (it’s easy to make your prison population’s numbers smaller than the US, just reclassify “prisoners” as “laborers”) who was imprisoned for calling for justice for her daughter — once it reached a crescendo on Weibo. And the arbitrariness of being thrown into one of these “labor camps” is nail biting — just ask this other young woman. (More on China as a real police state here and here).
Speaking of which, why aren’t civil libertarians up in arms about what the PRC is doing in the South China seas? The Chinese political class is saying that “hey, once upon a time Chinese fishermen worked down here thus these are all our islands… even if they are a few miles off the coast of another country.” If they can make this claim, why can’t any heritage group evict current property owners? And hey, this headline sounds very anti-imperial for sure: “China to formally garrison disputed South China Seas“.
China is not libertarian by any stretch of the imagination. Many of the policy makers want to rule the world. They feel that they are still the “Middle Kingdom” — the center of the civilized world and even relish the day they are not just “62%” on the way to becoming a superpower (purportedly again).
To suggest that they would be less assholes than the Americans is really hard to swallow. Again I’m not defending an American empire — I would like it peacefully dismantled as fast as possible — but I am saying the reality of the situation is that China would be no kinder a world ruler than the US.
Litmus Test 2.2: Smoke and Mirrors
Whenever there is an economic downturn in the US, politicians will typically play “wag the dog” and invade a country.
Whenever there is an economic downturn in China, policy makers at all levels blame the laowai (first the Japanese) and kick them out (and it is not like there are a whole lot of foreigners to kick out… mere 600k). The century of humiliation was horrible for China and the political class here uses it as a tool for their own gain during tough times.
And to be fair: perhaps more libertarians should move out here for a year or two, just so they can appreciate how awesome the US is. Yea, I said it, the US is still awesome in many respects.
Gimme some of that nice clean air! And food that won’t kill you because of poison and gutter oil! After all, there are reasons why the US is still the top destination for FDI and immigrants of all stripes.
China in the past 3 months:
- Last week the crew from CNN got roughed up outside of the courthouse in Hefei trying to find out info about the Gu Kailai case (Bo Xilai’s wife).
- The anchor for Al Jazeera got kicked out of China.
- Virtual blockade of a neighboring country (if you condemn the US blockade of Cuba, you should also condemn the Chinese blockade of the Philippines).
- Bloomberg News has been blocked now for more than a month for reporting about the financial tomfoolery of the family of the upcoming president, Xi Jinping.
- In-media, a HK based news source that is critical of the PRC was broken into and computers were destroyed.
- Dozens of words are banned each day on all media (Weibo, Baidu, news).
- Yang Rui, the head Chinese anchor for CCTV News (the only English-based mainland TV station out here… he’s the Sino equivalent of Larry King) called for all “foreign trash” to get kicked out of China.
Again, this is not to say that there are no problems in the US, that US foreign policy is love-thy-neighbor. It is not. This is simply to counter the claims by some writers currently wearing rose-tinted glasses.
Now you’re just being redundant
I think the surveillance panopticon both developing and developed countries are building is something that would have occurred freely and voluntarily anyways due to so many narcissists and to prevent insurance claims against negligence (e.g., apartment property owners building CCTV networks to lower their insurance premiums against vandalism, carjacking, etc.) In fact, here is a privately funded domestic drone you can by from Amazon for a mere $300.
- How many blind human rights activists are fleeing detention and monks burning themselves in the US? Slim to none.
- Twitter has actually publicly fought the US police state (like the OWS and NYPD) and in the event that they lose, will actually post how many court orders they receive.
- In China, Sina just deletes tweets (like they deleted the US Shanghai consulate because the consulate published smog alerts) and users have no idea if they have submitted your details for the police to come throw you into labor camps (similar as a prison but spelled differently). Bill Bishop recently noted that Sina’s operating costs have risen in part because of the need to hire more human censors (see here for more perspective about censorship in China).
- I could go on and on about China’s internal financial problems (see here and here), but suffice to say: China has huge non-performing loan numbers (NPL) coming out (double digit failure that is destroying any productivity just check out the 10-year NPL high in Wenzhou) and an aging workforce with huge pension liabilities, which believe it or not, is in worse shape than the US.
- China is utterly dependent on exports and is actually depreciating the yuan (RMB) relative to the USD over the past 5 months (source 1 2 3).
- China has built numerous face projects (mian zi gong chen) that are entirely unproductive and amount to little more than modern pyramids.
- China has to import large amounts of food (soybeans, pork) because they have evicted so many farmers and paved over good fertile land with parking lots and malls no one goes to.
If there was a prolonged global depression, where would you rather live: in a country that produces 20-30% of the worlds calories and the best medical practitioners — or live in a country that has to import cows from Australia because it refuses to liberalize beef bilateral trade with a certain U-S-A? Even if a USD currency collapse occurs its not like the US-based farms disappear, doctors melt into ooze or hospitals instantly fall apart.
And since China still pegs the RMB (which they have depreciated the past 5 months as noted above) to the USD, they will be in a world of hurt as they must necessarily import the fiscal and monetary policy of the US Fed and Treasury.
The unpleasant truth to the libertopia fantasy is this: the Chinese political class is not a meritocracy (nor is the US for that matter). Its leaders and policy makers are not libertarian goldbugs secretly planning on floating the RMB and/or adopting a commodity-backed currency.
If your primary motivations of coming to China is to be in the Promised Land, you will be gravely disappointed.
Litmus Test 3: Monaco is nice this time of year
Aside from a few outliers such as the Nordic countries (until the oil runs out and hospital bills drain the taxpayer dry), Switzerland, Monaco and a handful of city-states financially dependent on recycling laundered money (pro observation from Andy Xie), where else can a young twentysomething libertarian move to long-term?
As I have mentioned before, as a western expat I am part of privileged member in China. But if you want to interact with normal Chinese people, it can get frustrating because they are manhandled in even more nebulous ways by hongbao-desiring officials. Believe it or not, but uncertainty in legal proceedings is measurably worse in China (see the annual CPI report from Transparency International and the EodB annual study from the WB) — and there is little reason to believe it will get better.
So unless you work for a big multinational that wants you to do a “tour” to build up your overseas credentials and pays you the full Mercer expat package, moving to a developing country is probably not a good career choice.
And to borrow the words of a friend, one of the worst features of some libertarians is their tendency toward hyperbole. It also seems to be a tendency for both new and old hat libertarians alike to want to burnish their libertarian credentials by seeing who can say the most outrageous anti-US comment. If the US is really so terrible compared to other countries, then why don’t you just leave? I did and again, the other side of the rainbow is not pretty.
And for what it is worth: I doubt the US will in the short run, “get safer” (pre-9/11) so I don’t think that particular indicator is a really good litmus test or condition for when expats should return to the West. But if one wants to live a relatively free and economically prosperous life, the US is still best, by far.
Especially if you’re you do not have a <insert outlier> passport.
[Special thanks to the following for their insightful discussions: Stephan Kinsella, Manuel Lora, Anthony Gregory, Robert Wicks, Brian Martinez, Vijay Boyapati]