RED LANTERNS China, stagnant economy and repressive politics behind the flight of millionaires

The Henley Private Wealth Migration Report 2023 shows the exodus of Chinese tycoons. It is the first country in the world in outflow. After the economic boom between 2000 and 2017, today heavy clouds are looming in the high-tech sector as a result of Xi Jinping’s decisions. Singapore is the preferred destination in the East. The theme of freedom and rights as a motor of development.

Beijing () – A report on migration, prepared by the consulting firm Henley & Partners, shows that more and more Chinese tycoons are fleeing the country this year due to slowing economic growth and political uncertainty. The study, titled the Henley Private Wealth Migration Report 2023, reports that 13,500 high net worth people will leave China this year, making it the world’s number one country for outward migration of the “super-rich.” The “high net worth” category includes individuals who have at least US$1 million in cash and other readily usable liquid assets.

According to the Henley & Partners migration report, the Chinese economy recorded strong growth between 2000 and 2017, but it was not accompanied by an equally sharp increase in wealth and millionaires, whose numbers were negligible. Furthermore, the study raises serious questions about the future growth of high-tech, because the data could be affected by Huawei’s ban in many major markets. Added to this are the consequences of the pandemic and the effects of the prolonged confinements imposed by Beijing in the fight against Covid-19, which have negatively affected relations with the main trading partners. All of which adds to the critical questions being raised around the status of Hong Kong and Taiwan.

Based on survey data conducted in the first six months of this year, Henley & Partners estimates that there will be 122,000 millionaire emigrants, a record level that exceeds even the pre-pandemic level in 2019. Estimates speak of at least 823,800. millionaires in China, but capital flight will cause a further slowdown in the domestic economy, as the report by Nikkei experts also points out. Analysts and scholars state that health and safety, economic performance, taxes, and the healthcare system are some of the main reasons for the exodus. Emigration can improve the mobility of millionaires, allowing them to access some regions that do not require a visa and at the same time enjoy greater political stability.

In these two years, the Chinese authorities have intensified control over the Internet, finance and high-tech industries. President Xi Jinping has also expanded supervision to other areas and upheld the concept of “common prosperity” since the start of his third term as head of the Communist Party of China (CPC). Meanwhile, more and more Chinese high-tech companies are facing strict controls on data security, user privacy, and internal security in European countries and the United States. This is why an increasing number of Chinese companies are choosing to register in other countries, such as Ireland and Singapore, to reduce the risk of lawsuits and geopolitical conflicts and to have better market access. Chinese e-commerce companies Shein and Temu recently opened a new regional office in Dublin.

In February, following the disappearance of Bao Fan, one of the most prominent bankers in the investment and high-tech industry, his company announced that it was under investigation by the authorities. The disappearance of Jack Ma, founder of Alibaba, has also given rise to much speculation.

Henley & Partners shows that India ranks second in the number of millionaire emigrants. The millionaire drain is also happening in Russia, due to Moscow’s war against Ukraine, and Hong Kong is also losing its millionaires. The opposite sign is the trend in Singapore, the city-state that has become a magnet for wealth and attracts magnates from Asian countries although, at the same time, the influx of capital is skyrocketing house prices and the cost of living.

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