Although the endless soap opera of the global debt crisis is feeding the fears of many in the west, from my Chinese window as a private contractor, I have a more balanced judgment that raises questions about the health and wellbeing of China’s citizens.

Obsessed by the huge debts of the western countries, the rating agencies reflect the increasing distrust of investors. But are they properly advised? Besides financial considerations, they mainly disregard the fact that the credibility of a country is also measured by its health and environmental situation.

Rightly celebrated for its outstanding financial situation, the People's Republic of China obviously deserves its Triple A rating. But behind the curtain, something is cracking. Why are so many leaders and wealthy Chinese families persistently seeking to send their children abroad, often with the aim to acquire some western nationality? How to understand the desire to leave the world’s most vibrant economy to settle in countries that have been financially battered and appear to remain mired in a slump considerably into the future?

The state-owned China Daily reported on Nov. 1 that nearly half of the country’s millionaires are considering leaving the country, with 14 percent of them already having applied or in the process of applying for emigration. The story quotes a study, Private Banking White Paper 2011 released jointly by the Hurun Research Institute and the Bank of China. The results are said to be based on interviews conducted in 18 major cities, with the average asset holdings of the 980 respondents surveyed, average age 42, holding Rmb60 million (US$9.44 million).

While half of the investors said they want to leave for better overseas education opportunities for their children, according to the story, observers believe that personal and capital safety is an increasing concern for the rich who are choosing to transfer their wealth overseas. Their preferred destination: North America.

At least part of the answer lies in the environmental degradation that people in China face. It is not a theoretical topic. It strikes every family. Hospitals are overflowing with patients with frightening symptoms. Many have not revealed their reasons for concern. Now, however, people have started to speak.

Weibo, the Chinese version of Twitter, is filled with people who appear to believe in anything the government says. Disillusionment is considerable and accelerated with the deadly July 23 crash of the country’s showcase high-speed rail train in Wenzhou on July 23, 2011, that took the lives of 40 and injured another 190. Up to then, the feeling was that China could do almost anything. But the accident led to a wave of public outrage. Now, in a report last week, the government says there were serious design flaws in the signaling equipment, crash investigators found sloppy development of the signaling equipment, bidding irregularities, safety inspectors who didn’t do their job and other problems.

Among other things Weibo users hold responsible: air pollution, a food chain full of heavy metals, hazardous materials at home, all enhanced by the passivity of local authorities. Chinese newspapers abound with health incidents. One day mercury is detected in a soft drink; another day melamine is found in a rice protein concentrate. In February, it was discovered that 200,000 metric tons of vegetables originating in Hainan went on sale despite the fact that they had been contaminated by the dangerous, illegal pesticide isocarbophos despite the fact that it had been banned in 2004 – seven years earlier.

While government officials are aware of these situations, they are reluctant to make decisions that would slow the mandatory increase of the living conditions for China’s remaining poor – estimated at 488 million living on less than US$2 per day in 2009 despite the country’s stellar gains.

Already shaken by the impact of the deceleration of the world economy, authorities play with public announcement effects. Here an environmental charter for companies that are exporting. There the setting up of Eco Cities. These are no more than a smokescreen because the cost of the cleaning up of all China could reach an astronomical amount. Even worse, authorities tolerate the unthinkable -- as recently authorization given by the Ministry of Health of the presence of Staphylococcus in frozen products for everyday use such as rice. Thus the health bill debt could be unreachable for future generations.

So it is logical that large numbers of Chinese are looking to escape from this situation. Whyshould their children have to pay for what they are not responsible for?

These environmental and health issues should be debated by the rating agencies in addition to the country’s economic performance. In summer of 2011, everyone predicted the worst concerning a downgrade by Standard & Poor’s of the United States credit rating because of its high debt load and seeming political inability to do anything about the issue. That was followed in December when Fitch also warned of a possible downgrade if the US didn’t get its house in order. Nonetheless, this country borrows always at low rates, probably because the US still offers a healthy and secure environment.

The ratings agencies should consider widening their regimes to take into consideration more than just the ability to issue certain types of debt obligations and debt instruments themselves. A credit rating for an issuer perhaps should take into consideration more than just creditworthiness from an economic standpoint. If China faces a long-term crisis from the vast amount of environmental cleanup it faces and from the health of the hundreds of millions of people who must make the state work, there should be some rational criteria by which to measure these problems. If China were to take the path of strengthening its institutions towards greater democracy, efficiency and environmental standards, there should be nothing about that which should disturb investors.

(François de la Chevalerie is a contractor based in Tianjin, China.)

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