Chinese billionaires and elites left the country in droves after the Chinese Communist Party’s 20th National Congress ended. Experts say that this Party Congress is a turning point. As Xi Jinping was re-elected for an unprecedented third term, Chinese policy will once again move to the left, becoming more socialist. This hurts the Chinese business environment. 

In his report to the Congress, Xi put an emphasis on “common prosperity.” Also for the first time, Xi proposed to “keep income distribution and the means of accumulating wealth well-regulated.” He went on to add, “adjust excessive income and prohibit illicit income.”

“Common prosperity” is not a new policy, but it is the first time Xi talked about monitoring how much wealth people accumulate and how they acquire that wealth.

Alicia Garcia-Herrero is the chief economist for Asia-Pacific at Natixis – a corporate and investment bank.

She said that Xi’s 20th Congress report sends a message to Chinese private sectors. They are being targeted, and they better be careful.

On October 23, the world was introduced to the new seventh Standing Committee of the Chinese Communist Party, the most powerful group of people that will rule China for the next five years. All the reformers are no longer on the team. The four who got in, including Li Qiang and Cai Qi, were all hard-liners from Xi’s closed faction. Soon after, Chinese major stock markets dropped sharply as pessimism spread about China’s future. 

After the National Congress, public-private partnerships were also revived. Giant private businesses like Tencent and Alibaba signed new contracts with various state-owned companies. All signs pointed to a return of the planned economy model. This made Chinese and foreign business owners very scared.

Current affairs commentator Yokogawa talked with Chinese language media Xin Tang Ren. This is the rhythm of the socialist economy in every way, not just the economy but also the way the whole society is run. It’s a walk back to Mao Zedong’s time.

According to the Financial Times, because Xi was re-elected, China’s rich and powerful people are leaving the country because they are worried about their money and even for their own safety.

Ryan Lin is director of Singapore-based Bayfront Law. During the 20th Party Congress, five Chinese families asked him to help them set up a “family office” in Singapore. “Family offices” are private entities used to manage a family’s wealth. 

Last year, Lin helped open 30 family offices in Singapore for wealthy Chinese to help them relocate and transfer their assets to the city-state.

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