After three years of using its epidemic prevention policy, China’s economic development has been hit hard. The wealthy Chinese class is trying to reduce their local holdings of assets. Instead, they transfer assets to the United States and other countries for investment. Some analysts say this trend will accelerate in 2023.

According to a Reuters report, the interests of wealthy Chinese businessmen have suffered a significant loss this year. They are even more worried about the impact of the new crown virus and the Russia-Ukraine war on China’s geopolitics. It results in economic uncertainty.

Reuters cites information from Eurekahedge data showing that hedge funds with Greater China strategies have lost 12.9% for the year to the end of November.

Some companies said that rich people are panicking about Xi Jinping’s “common prosperity” plan. In June, The Henley Global Citizens Report estimated that China would see 10,000 high-net-worth individuals leave the country this year. This number comes second only to Russia.

According to Reuters, more middle-class people may have a more pessimistic outlook on their prospects at home as a result of the COVID limits and associated protests.

Although it is not new for Chinese billionaires to invest overseas, in the past, most of them invested in Chinese assets. However, things have started to change. 

Apollo News cited Jason Hsu, founder, and chairman of Rayliant Global Advisors, a securities investment consulting company. He said that the past source of these people’s wealth would not have been U.S. stocks or investments in U.S. real estate. 

But now it’s starting to change. 

Jason also revealed that he received inquiries from many mainland family offices seeking to understand the economic policies and investment rules of the United States.

A Hong Kong-based family office portfolio manager with assets of more than $1 billion requested anonymity. He said that their ratio of assets invested in China had been significantly reduced, from 80% at the end of last year to 33%. This trend will expand in the future.

In addition, another partner in a Chinese family office said his firm was spending a lot of time researching fund managers and investment opportunities in Japan and the U.S. while still keeping an eye on China’s market. This company has over $1 billion in assets. 

Reuters quoted two sources familiar with the matter. They said that the U.S. Consulate in Hong Kong held two online meetings in October and November to help Chinese family offices interested in investing in the United States establish contact with U.S. fund managers.
Eva Lee, head of Greater China equities at UBS Global Wealth Management Chief Investment Office, said, “Investors have learned a lesson this year, they realized diversification is just so important.”

Sign up to receive our latest news!

By submitting this form, I agree to the terms.