China millionaire exodus to continue this year: report

Emigration forecast to reach 13,500 as Xi clamps down, economy slows

Wealthy Chinese tourists on a cruise in Singapore: China is expected to see a net outflow of 13,500 high net worth individuals this year.   © Getty Images

PAK YIU, Nikkei staff writerJune 13, 2023 17:00 JST

 

HONG KONG -- An exodus of Chinese millionaires is expected to continue this year, according to a new report by investment migration consultancy Henley & Partners, as the economy slows and the government tightens political controls.

China is expected to see a net outflow of 13,500 high net worth individuals this year, extending the loss of millionaires in the past decade, according to the Henley Private Wealth Migration Report.

While the country is estimated to have 823,800 millionaires, the emigration trend could see millions of dollars brought with those leaving, which could worsen China's sharp economic slowdown. Henley defines high net worth individuals as people with more than $1 million in investable wealth.

"General wealth growth in China has been slowing over the past few years, which means that the recent outflows could be more damaging than usual," said Andrew Amoils, head of research at New World Wealth. "China's economy grew strongly from 2000 to 2017, but wealth and millionaire growth in the country has been negligible since then."

Globally, 122,000 rich individuals are forecast to migrate this year, topping the record high in 2019, according to Henley -- which derived its forecasts from inquiries and data for the first six months of the year.

Emigration enquiries from East Asian clients skyrocketed after pandemic restrictions were abolished at the beginning of this year, exceeding the 2019 peak figure by 15%.

"There are those who wish to improve their mobility with greater visa-free access to key regions, or secure better access to health care, or enjoy greater political stability," said Denise Ng, director of Henley & Partners Hong Kong.

Chinese President Xi Jinping cemented a third term and has recently cracked down on private businesses with a series of raids on consulting companies, while tightening the government's leash on the tech and financial industries. Bao Fan, founder of investment bank China Renaissance Holdings, mysteriously disappeared in February before his company announced he was assisting in an official investigation.

Singapore has emerged as a hot spot for Chinese money since the government in Beijing imposed draconian coronavirus measures that isolated the country for nearly three years and accelerated emigration of the super rich last year. The inflow of wealth into the city-state has fueled increases in house prices and other costs of living. Around 10,800 millionaires emigrated in 2022, Henley & Partners said.

Hong Kong is also expected to see 1,000 millionaires emigrating this year, which could hamper efforts by the city's government to lure the wealthy and turn the financial center into a wealth management and family office hub.

Ng said more high net worth individuals from northern Asia are seeking to move to Europe, while fewer are looking to move elsewhere in Asia, with applications for Asian migration programs dropping 20%.

Overall demand has soared with a record number of investment migration program enquiries in the first quarter, the investment migration consultancy said.

Although wealthy individuals have historically tended not to move to countries where they acquire residence rights or citizenship, there has been a shift to relocating their families amid "recent and persistent turmoil," the report notes.

The number of millionaires expected to exit India, which overtook China to become the world's most populous nation earlier this year, came second globally. But the predicted net outflow for 2023 was lower, at 6,500, compared with last year, due to growing numbers of new rich.

Australia is expected to attract the biggest net inflow of high net worth individuals this year at 5,200, while Singapore is forecast to receive a record-high net inflow of 3,200 wealthy individuals, according to the report.

https://asia.nikkei.com/Economy/China-millionaire-exodus-to-continue-this-year-report

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