China’s millionaires fleeing repression and a stagnant economy
The “Henley Private Wealth Migration Report 2023” shows that Chinese tycoons are leaving in droves, giving China top spot for net outflow of high net worth individuals. After an economic boom that lasted between 2000 and 2017, China’s high-tech sector faces uncertainties because of Xi Jinping's policies. Singapore is the preferred destination in Asia. The quest for freedom and rights is a major factor behind the exodus.
Beijing (AsiaNews) – A report released by migration consultancy Henley & Partners shows that more and more Chinese tycoons are leaving the country this year because of slowing economic growth and political uncertainties.
Titled Henley Private Wealth Migration Report 2023, the study estimates that about 13,500 high net worth individuals will leave China in 2023, the highest in the world. People who have at least one million US dollar in cash and highly liquid assets are defined as high net worth individuals.
The report notes that China's economy experienced strong growth between 2000 and 2017, but since then the growth in wealth and millionaires was negligible.
It also raises serious doubts about future growth in high-tech since Huawei was banned from several major markets.
The fallout from the COVID-19 pandemic (like prolonged lockdowns) and the status of Hong Kong and Taiwan have also harmed relations with China’s major trading partners.
Based on data for the first six months of this year, according to Henley & Partners, global net wealth outmigration is expected to reach a new high of 122,000 individuals, far more than the record set in 2019 before the pandemic.
China is home to at least 823,800 millionaires, but for Nikkei, capital outflow will further negatively impact its already slowing economy. Economic performance, security, taxes , and the quality of healthcare are the main factors in the exodus.
Emigration can improve millionaires’ mobility, giving them access to politically stable regimes and regions that do not require visas. This is a far cry from what many experienced in the past two years, when Chinese authorities cracked down internet, finance and high-tech companies.
Since he began his third term as head of the Communist Party of China (CPC), President Xi Jinping has expanded government oversight to more areas and backed the concept of "common prosperity".
At the same, more and more Chinese high-tech companies are facing stricter scrutiny by European countries and the United States over data safeguard, user privacy, and national security.
As a result, many Chinese firms are registering in other countries, like Ireland and Singapore, to have better market access and limit the risks of lawsuits and geopolitical conflicts. Recently, for example, Chinese e-commerce companies Shein and Temu set regional offices in Dublin, Ireland.
In February, after the disappearance of Bao Fan, one of the most prominent bankers in the investment and high-tech industries, his company, China Renaissance Holdings, announced that he was under investigation by the authorities.
The disappearance of Jack Ma, founder of Alibaba, also sparked much speculation.
China is not alone in losing its rich. Henley & Partners rank India second in terms of millionaire emigrants. Russia too is losing its high net worth individuals since it attacked Ukraine. Hong Kong is not faring much better.
By contrast, Singapore has become a wealth magnet for Asian tycoons; however, the capital inflow is driving up local housing prices and the cost of living.
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