Shanghai’s strict lockdown policy has led to chaos, An investment immigration consulting company estimates that around 10,000 high-net-worth individuals in China this year will find a way to take their assets worth a combined $48 billion out of the country. But the question is whether Xi will easily let them go.
Bloomberg reports that while Chinese policymakers have not explicitly tightened restrictions on immigration. Immigration lawyers say leaving China has become increasingly difficult in recent months, as the time to issue passports has increased, and the document requirements have become more complicated. There is even a phenomenon of clipped passports for unknown reasons. Overseas banks, which have long helped locals avoid the Chinese regime’s capital controls, are also gradually withdrawing from China, making it difficult for the rich to transfer large amounts of money out of China.
Investment migration consulting company Henley & Partners estimates that a group of 10,000 high-net-worth residents is finding ways to withdraw $48 billion from China this year—the second largest predicted wealth and outflow from any country after Russia. The company also said that overall wealth growth in the country has slowed down over the past few years. As a result, recent cash outflows from high-net-worth individuals could cause more damage than before.
While Xi Jinping focuses on the policy of “common prosperity,” the situation between the rich and the regime has become increasingly tense. Beijing is placing a high priority on a leadership meeting later this year and Xi is expected to win a third term, but the long-term economic damage to China due to the ‘Zero-covid’ policy will ultimately depend on the migration of the talented and the wealthy. Nicholas Thomas, an associate professor at the University of Hong Kong, points out that the outflow of talent and potential capital (of the rich) is at “the obvious cost of the Chinese economy.”
Harry Hu, a 46-year-old restaurant owner in Shanghai planning to move to Canada, said, “Can you imagine that I am in the most developed city in China and almost starved to death during the city’s first lockdown?” Harry Hu recently sold most of his stake in two high-end restaurants in Shanghai for $3 million and hired an immigration and property management lawyer to help him move abroad. “I’m really sad to leave here, but it’s time to leave,” he said.
As the Chinese version of the New York Times Chinese edition reported, according to the “WeChat Index” released by WeChat, on April 3, a week after Shanghai’s closure, the search index for the word “immigration” on that day was four times more than the previous month. Baidu statistics also show that from March 28 to April 3, searches such as “conditions to immigrate to Canada” and “where to go abroad” increased by more than 20 times compared to the previous month. In addition, some immigration departments have posted about the long queues of people coming to consult on social media.
According to Bloomberg, Chinese immigration lawyers and consultants say that the number of immigration consultations this spring (during the lockdown in Shanghai) has increased
fivefold compared with a year ago, and the number of inquiries about transferring money has increased rapidly. Sumi, an immigration consultant in Shanghai, said: “With the epidemic control measures, many people really feel that they have no other choice. I see people who were hesitant to move in the past but eventually made the decision (to flee).”
Jennifer Hsu, a researcher at the Australian consulting organization the Lowy Institute, points out that there are still many institutional obstacles to leaving China, not only from China but also from the destination countries. Since the end of 2020, the Chinese regime has discouraged non-essential travel accompanied by epidemic prevention measures.