An IMGW News Report
Smart money, as the saying goes, is pulling out of China. The country’s millionaires and billionaires are emigrating in record numbers, with 2024 likely to see an outflow of 15,200 such individuals, according to Henley & Partners, a prominent investment migration firm. This figure is approximately 10% higher than 2023’s outflow of 13,800. Additionally, around 500 high-net-worth individuals are expected to leave Hong Kong, further increasing the total outflow.
Most of these migrants are heading to the United States and Singapore, drawn by the prospect of greater personal freedoms, a better lifestyle, flexibility of travel, top-notch education options, and high-quality healthcare. The wealth carried by each migrant is estimated to be between $30 million and $1.0 billion, based on past trends.
The reasons cited by migrants for their move vary, but many mention the uncertainties implicit in China’s current economic situation, which raises questions about future investment returns. The ongoing property crisis and real estate turmoil in China exacerbate this uncertainty, as falling real estate values have hurt household wealth and raised questions about the country’s overall economic growth prospects. Some migrants reference the downgrading of China’s financial outlook by two credit rating agencies, Moody’s and Fitch, as a significant factor. Additionally, the hostility President Xi Jinping has shown towards privately owned businesses and personal wealth adds to their concerns.
Singapore has long been the preferred destination for such migrants. However, Singapore has recently increased its scrutiny of inbound Chinese wealth. Even those who have nothing to hide might prefer to avoid the bother and loss of privacy now implicit in a Singapore haven. Canada and the United States will remain popular alternatives for these Chinese and their money, offering more personal freedoms and lifestyle benefits. The United Arab Emirates has also gained popularity, offering zero income tax, a luxury lifestyle, and so-called “golden visas” that facilitate the movement of investment funds easily and privately. Japan, too, has gained popularity due to its proximity to China, an attractive lifestyle, and its reputation as one of the safest countries in the world.
Globally, China is not alone in witnessing an exodus of high-net-worth individuals and families. South Korea and Taiwan have also seen significant departures. For these two countries, security concerns are the paramount reason. For South Korea, the belligerence of North Korea looms large, while for Taiwan, it is China’s belligerence that prompts people to relocate their life, assets, and family out of potential harm’s way. Questions about the willingness of the United States to defend Taiwan have also had an effect, especially if Donald Trump moves into the White House in 2025.
China watchers can note two telling messages in this migration news. Firstly, it makes a clearly negative commentary on President Xi Jinping’s economic management. Secondly, the departure of this wealth will make Beijing’s efforts to revitalise China’s economy much more difficult, though there is no way to quantify the effect. The outflow of high-net-worth individuals, each carrying significant wealth, is a stark indicator of the challenges facing China’s economic and political landscape.