Chinese millionaires and billionaires are increasingly choosing to emigrate, a trend that reflects their lack of confidence in Xi Jinping’s economic management and the future prospects of the country’s economy. This “vote with their feet” phenomenon indicates that the smart money is leaving China, with a projected out-migration of 15,200 high-net-worth individuals in 2024. This number represents a 10 percent increase from the previous year’s out-migration of 13,800, and it excludes the 500 wealthy individuals expected to leave Hong Kong. The most popular destinations for these emigrants are the United States, Canada, and Singapore.
While it is difficult to determine the exact amount of wealth that these individuals will take with them, estimates from Henley & Partners suggest that each migrant could potentially relocate between $30 million and $1 billion in wealth. This substantial outflow of capital indicates the concerns surrounding China’s current economic situation and its implications for future investment returns. The ongoing property crisis and real estate turmoil are particularly worrisome, as falling real estate values have significantly impacted household wealth and raised doubts about China’s overall economic growth prospects.
In addition to economic uncertainties, some emigrants also cite the downgrading of China’s financial outlook by credit rating agencies Moody’s and Fitch as a motivating factor. However, one unspoken reason for leaving China is likely the Xi regime’s historically hostile stance towards privately owned businesses and personal wealth. This underlying tension has undoubtedly influenced many high-net-worth individuals’ decision to seek greener pastures elsewhere.
Traditionally, Singapore has been the preferred destination for Chinese migrants, but recent increases in scrutiny towards inbound Chinese wealth have made it less appealing. Even those with nothing to hide may prefer to avoid the hassle and loss of privacy associated with establishing a haven in Singapore. As a result, Canada and the United States have emerged as popular alternatives for Chinese wealth. The United Arab Emirates has also gained traction, offering zero income tax, a luxurious lifestyle, and attractive investment opportunities facilitated by “golden visas.” Japan, with its proximity to China, attractive lifestyle, and reputation as one of the safest countries globally, has also seen an increase in Chinese migrants.
It’s important to note that China is not the only country experiencing an exodus of high-net-worth individuals and families. South Korea and Taiwan have also witnessed a significant number of departures. In the case of these two countries, security concerns outweigh economic considerations. North Korea’s belligerence poses a threat to South Korea, while Taiwan fears aggression from communist China. Uncertainties surrounding the United States’ commitment to defending Taiwan have further fueled these migration decisions.
The implications of this out-migration trend are twofold. Firstly, it serves as a clear critique of Xi Jinping’s economic management. The departure of wealthy individuals and their capital will undoubtedly hinder Beijing’s efforts to revitalize China’s economy. The exact extent of this impact is difficult to quantify, but it highlights the challenges that lie ahead.
In conclusion, the increasing number of Chinese millionaires and billionaires choosing to emigrate reflects their lack of confidence in China’s economic prospects and Xi Jinping’s leadership. This trend has significant implications for both China’s economy and its global standing. As high-net-worth individuals seek more stable and secure environments for their wealth, countries like the United States, Canada, Singapore, and the United Arab Emirates stand to benefit from this capital influx.
