Much of the money getting made in China is ending up in the hands of government employees who should not have very lucrative jobs, and the combination of lavish personal consumption by them and obvious advantages afforded to their children ("princelings") is causing audible social discontent about corruption.

The Chinese Communist Party considers audible social discontent to be an existential threat and responds to it with overwhelming force. Part of the response is banning public expressions of discontent. Part of it is shooting corrupt officials after show-trials. Part of it is rejiggering incentives, to make it clear that you'll have to keep your money under the watchful eye of the CCP rather than discretely investing it in a country which probably won't execute you.

>Much of the money getting made in China is ending up in the hands of government employees

BS

Some people making money in China are doing so through corrupt practices, or for other reasons fear that the government will seize their assets. These individuals probably continue to invest in China. They just want some of their wealth in a place safe from forfeiture.

Some of China's growth looks bubble-ish, even to wealthy Chinese. If you think that, you might want to get your wealth out before the bubble bursts.

Yeah -- or at the very least, diversify.

The CCP's concern is that once people get wealthy in China, they want to leave China with the money.

It's a legitimate concern rooted in past precedent. I also think this is partly why you are seeing large expenditures aimed at green-tech, etc. If you can turn around some of the social ills (namely pollution), you can stem the flow a bit.

It's not just quality of life. A lot of wealthy people have at least some exposure to criminal behaviour, and are not keen on being swept up in white collar prosecutions.

Makes me wonder why Canada isn't run by triads yet.

um, where have you been the past 2 years? China's stock market crashed, its forex reserve down 1 trillion, its millionnaires fleeing the country, it has imposed massive (but ineffective) capital control to prevent any money from leaving, its gdp/debt ratio way above 300%, its economy propped up by shadow debts.

There is no argument, it's a fact. There is capital flight out of China. Their FX reserves have plummeted because they are trying to support the Yuan from dropping off the side of a cliff.

> Their FX reserves have plummeted

On what timescale? WP says they have $3T, same as 2016.

https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_C...

Says the very Wikipedia article you just linked?

https://www.reuters.com/article/us-china-economy-forex-reser...

The government control in China is a driving force to spread your capital outside. Remember, average citizen can only transfer out $60k per annum. Not much.

Sure, but I can imagine that wealthy western investors also want exposure to growth in China (capital inflows).