According to the latest report from the investment immigration company Henley & Partners, an estimated 15,200 wealthy Chinese individuals with liquid assets of $1 million or more left China in 2024, surpassing any other country in terms of the number of wealthy individuals who emigrated. The most favored immigration destinations for Chinese wealthy individuals are the United States, Canada, the European Union, Singapore, Japan, and Hong Kong.
The trend of Chinese affluent individuals immigrating overseas has been present for many years, but the discontent with Beijing’s authoritarian political system has intensified during the COVID-zero-clearance period. After easing COVID control measures, more and more Chinese wealthy individuals are accelerating their emigration overseas.
Al Jazeera reported on January 8th that Meng Jian, who moved from Shanghai to Hong Kong five years ago, bought herself a special birthday gift – critical illness insurance.
“I don’t believe that the Chinese healthcare system and insurance market can provide me with the medical care and insurance I may need in the future,” Meng Jian told Al Jazeera. For fear of trouble from the Chinese Communist Party, she did not want to reveal her real name.
“So, I decided to open a bank account in Hong Kong and purchase insurance there,” she said.
Since then, as Meng Jian’s wealth continued to grow, she expanded her financial transactions only outside of mainland China. Today, most of her business is conducted through Hong Kong, and recently she opened a bank account in Singapore and transferred most of her assets to that account.
“I don’t want to keep too much money in China because I feel that in many aspects, the current situation in China is not very good,” she said.
China’s economy is facing one of the most challenging situations in decades. The pace of economic slowdown is significantly lower than historical trends, youth unemployment remains high at over 17%, household spending accounts for around 40% of the GDP, still far below the global average, and the real estate market continues to be in a long-term slump with prices dropping by about 8% from their peak.
Meanwhile, in recent years, a large number of industries, from technology to finance and private tutoring, have been under comprehensive attack by the Chinese Communist Party, causing unease in the business community. The disappearance of prominent businessmen like Bao Fan has also left the business community unsettled.
Bao Fan is one of China’s prominent investment bankers in the technology sector, and since his investment firm, Huaxing Capital, announced its “cooperation” with an investigation in February 2023, there has been no news of him. Authorities have not provided any accusations against him or details on the status of his case.
“Considering everything that’s been happening, I think relying on the Chinese market is unsafe,” Meng Jian said. “The situation is too unstable.”
After transferring most of her funds out of China, Meng Jian is considering leaving China one day. “I am just a small business owner, but I know many wealthier individuals with more assets are also considering leaving China,” she said.
In fact, many wealthy Chinese individuals have already taken this step. The Hurun Research Institute’s 2024 High Net Worth Individuals Brand Preference Report released in March 2024 shows that nearly 40% of surveyed high net worth families are considering moving overseas.
According to Henley & Partners data, in 2023, 13,800 high net worth individuals left China, a 28% increase from 2022, the highest among all countries. The company predicts that by the end of 2024, there will be 15,200 Chinese millionaires leaving China, setting a new record.
Allan Von Mehren, Chief Analyst and Chinese Economist at Danske Bank, told Al Jazeera, “If this is the beginning of an accelerated trend, it could pose economic challenges for China.”
When millionaires leave, they often take their wealth with them. Capital flight among foreign investors in China has already had an impact. In the second quarter of 2024, overseas companies withdrew a record $15 billion from China.
Sara Hsu, Associate Professor of Chinese Finance at the University of Tennessee, told Al Jazeera that the surge in capital outflows will only further damage the already struggling Chinese economy.