Ten thousand wealthy Chinese are trying to take their wealth out of the country

Iron-clad, seemingly endless lockdowns of finance capital and brutal, fanciful crackdowns on major industries do not inspire confidence in high-income earners? Who would have guessed?

Chinese President Xi Jinping tried the experiment anyway. Today, investment migration consultancy Henley & Partners estimates that 10,000 wealthy Chinese residents want to withdraw $48 billion from the country this year.

The Xi market

Jinping’s approach to the pandemic, built around a zero Covid strategy, included five weeks of strict lockdowns in Shanghai earlier this year, which led to residents shouting and banging pots and pans from their home in protest. Last month, a rare public protest erupted in the city among shopkeepers demanding compensation for damage to their livelihoods.

At the same time, Xi has thrown regulatory hammers at some of his country’s biggest tech companies. The first wave of crackdowns wiped $1 trillion from the markets. Subsequent crackdowns included a ban on almost all for-profit tutoring conducted by education companies and a complete ban on mining, trading or sending digital currency, wiping out trillions more. With this economic backdrop, it’s no wonder that many Chinese people who have the most wealth to lose want to get by:

  • In Singapore, the number of family offices nearly doubled last year, according to the Monetary Authority of Singapore, as Chinese entrepreneurs moved their families overseas.
  • Emigrants also lack the time and means to get their money elsewhere – Chinese citizens can only convert $50,000 yuan into foreign currency in a single year. Tricks to circumvent this cap, such as using cryptocurrencies, are quickly banned.

“It’s just easier to put China aside for now when you see no end in sight with Covid Zero and the return of geopolitical risk,” said Matt Smith, chief investment officer of the investment firm of $31 billion Ruffer, which closed its Hong Kong office. Bloomberg.

The biggest loser: China ranks second among countries in Henley & Partners’ forecasts of wealthy outflows. Leading, unsurprisingly, is Russia with 15,000 emigrants expected this year.

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