More than half of Chinese millionaires are thinking about leaving the country, and 14 percent have applied or are in the process of applying for emigration, a recent report says.

The "Private Banking White Paper 2011", by the Hurun Research Institute and the Bank of China, said that among individuals with assets of more than 10 million yuan ($1.57 million; 1.24 million euros) in 18 cities, the average asset holdings of the 980 surveyed were 60 million yuan, and the average age was 42. The US is the most popular immigration destination, attracting 40 percent of the respondents who plan to leave China, followed by Canada with 37 percent, Singapore with 14 percent and Europe with 11 percent. One-third of the rich surveyed owned foreign assets, accounting for 19 percent of their investment assets. Another one-third said they planned to invest abroad. And the most popular investment is property.

Why do the millionaires want to emigrate?

First they want better overseas education opportunities for their children. Giving their children a competitive edge in a new kind of rat race, in which millions of Chinese are striving for advancement, is well worth the cost of applying for emigration apparently.

Second, they want personal security. Living conditions in developed countries are better, with a higher level of social welfare, healthcare and medical insurance. In China they would have to live with serious environmental pollution, sometimes toxic food and unreliable pension insurance.

Third, rules in China protecting private assets remain unfinished work. Not only does unfair market competition exist, including government market meddling, but State-owned assets enjoy a monopoly. All that encourages the outflow of private assets. High inflation, the real-estate bubble and the sharp slowdown in external demand have only served to worsen conditions for business in China.

Fourth, new policies were introduced last April to restrict residents in 43 major cities from buying second or third homes, greatly reducing property transaction volumes in many cities. Essentially the tightening policy has squeezed out capital in the property market. So the millionaires need to diversify and manage their assets overseas. In addition, the appreciation of the renminbi gives them an incentive to invest abroad. Investing in property is the most basic and convenient way of doing this.

It has been suggested that the survey should serve as a warning to the government - that "hot-money outflows" is one of four systemic risks that could lead to a hard landing for the economy, and it raises an important question. When rich people leave the country will they also transfer their wealth to their new homes?

If the rich leave, the Chinese economy may face collapse; when the wealthy and top-flight entrepreneurs leave, the pace of economic growth in China may slow.

Finally, the exodus of Chinese millionaires will reduce the power of the middle class, an important force in maintaining social stability, thus exacerbating social tensions. In any country a strong middle class helps maintain social stability, the loss of which removes a protective screen between the grassroots and the wealthiest.

Another question that needs to be asked: Is the business environment in foreign countries really safe?

While developed countries' GDP is driven mostly by consumption, China's is driven by manufacturing. Over the past decade the circulation of global capital has been turned upside down, with capital flowing from poor countries to rich ones. China has sacrificed manual and natural resources for a large amount in foreign exchange reserves. To reduce debt, the US has run a loose monetary policy for many years, leaving the global market with high inflation. What's more, the US enjoyed economic prosperity between 1991 and 2006.

Bearing in mind the theory of business cycles (prosperity is always followed by recession), US economists will have long been aware that recession was on the way. The US government has eased immigration restrictions right now, obviously, with the aim of attracting assets to improve its economy so as to reduce unemployment.

In fact, many economists believe that the shift in economic power from West to East is accelerating and the rich world will lose some of its privileges. It is well known that China and India are the biggest and fastest growing of the emerging economies. Debt-ridden rich countries such as the US have had scant growth since the financial crisis. As bad news about the eurozone continues to pour out, its economy is deteriorating rapidly.

On the other hand, it is impossible for the rich to move their money out of China in large amounts, according foreign exchange regulations, which stipulate that in the event of, or the possibility of, a serious disequilibrium in the balance of payments, or a severe crisis in the national economy, the government may adopt safeguards, controls and other necessary measures to deal with the balance of payments.

So the flow of capital across China's borders is closely monitored.

To a large extent the business environment in China is relatively positive. The government has adopted proper policies and measures to tackle overheated investment growth, the excessive trade surplus and excessive liquidity. The government has resolutely stuck to a strategy of expanding domestic demand; adopts policies and measures to encourage consumer spending; and is raising urban and rural incomes, particularly for low-income people. Exporting cheap goods to the rich world has turned to internal sources of spending. As a result, consumer spending has been growing steadily.

Many rich people who are emigrating also think they will keep a great deal of their money invested in China, so rich people leaving does not equate with capital flight. It is hard for immigrants to create a new business in foreign countries, especially in the US and Britain, for the simple reason that immigrants are not familiar with the business environment or regulations in Western countries as much as in China. At the same time, China is going through wide-ranging and deep-going change, and the number of sustainable investment projects has multiplied. So having children study abroad while their parents run their business in China is common.

Pressure caused by the economic and scientific dominance of developed countries will not disappear any time soon. Loopholes still exist in China's regulatory framework and measures taken to change the way the government functions have yet to reach fruition. But the government has been well aware that changes in the way society is built and organized are needed, and that the interests of different groups need to be balanced.

Good progress has been made in reforming the government administration system and the judicial system. To reduce social inequalities and ensure equity and justice, a culture of clean government is being fostered. Overall, the business environment in China is improving.

The fact that more than half of China's millionaires are either considering emigrating or have taken steps to do so highlights worries among the business elite about their quality of life and financial prospects, despite the country's rapid growth. Indeed, this trend should be regarded as a signal, bringing not only challenges but also opportunities. Much depends on how well China manages its economic transition.

The shift will not be easy. But the balance of the world economy is shifting, with remarkable speed, in favor of the populous emerging markets. China's rapid growth is still the envy of the Western world. With steady reforms, economic advances and changes in the political environment, the flow of investment will continue to increase, whether in the form of money, technology or of talented people.

Zhang Jianping is a researcher at the Institute for International Economics Research under the National Development and Reform Commission. Ma Wenhui and Tian Shuai are graduate students at Peking University. The views expressed do not necessarily reflect those of China Daily.