According to the Financial Times, wealthy Chinese are now prepared to move out of their country as they share a pessimistic outlook of China under Xi Jinping and the Chinese Communist Party ruling.
The congress concluded on Sunday, October 23, with Xi strengthening his power within the Party with another five-year term, an unprecedented political move since Mao Zedong.
Chinese stocks did not welcome the news as Chinese stocks listed in mainland Hong Kong and New York all tumbled.
Now the Chinese rich reacted by triggering their exit plans.
A Europe-based lawyer working with wealthy Chinese clients, David Lesperance, said Xi’s third term is a tipping point for China’s business elite.
Lesperance told the Financial Times, “Now that ‘the chairman’ is firmly in place. I have already received three ‘proceed’ instructions from various ultra-high net worth Chinese business families to execute their fire escape plans.”
Experts said Xi Jinping’s “common prosperity” drive is the key factor for wealthy Chinese shifting their wealth out of the country. Common prosperity is an approach that aims to curb “excessive” income to reduce wealth inequality in China.
Singapore is seen as a safe place for wealthy Chinese. The country has been a favorite destination for many years for Chinese billionaires. In recent years the island has become the top place amid unpredictable factors in China. Especially during the pandemic, the trend is more evident.
Kia Meng Loh, a senior partner at Singapore-based Dentons Rodyk law firm, said that Chinese clients inquired about setting up family offices in Singapore long before the congress took place.
Affluent Chinese frequently set up family offices when transferring money to Singapore. They are privately held enterprises that manage a rich family’s investment and wealth.
The Financial Times cited data from Citi Private Bank, showing that family offices in Singapore surged five times between 2017 and 2019 and almost doubled from 2020 to 2021.
Henley & Partners is a London-based investment immigration consulting company. Singapore’s Lianhe Zaobao cited a Henley report in August revealing that about 4,200 high-net-worth individuals in China migrated abroad in the first half of 2022.
The consulting firm pointed out that, among the 10,000 millionaires seeking migration, each is expected to bring with them about $4.8 million on average. As a result, as much as $48 billion in wealth is estimated to flow out of China.