In recent years, the private aircraft market in mainland China is experiencing a noticeable contraction. By the end of last year, the number of private aircraft in China had decreased by one-third, while other Asia-Pacific markets continued to grow by 20%. Economists analyze that the shrinking wealth of the top tier in China is strong evidence of the country’s economic “negative growth.” The flourishing development of private aircraft in other Asia-Pacific regions is actually related to capital flight from China.
Reuters recently reported that according to data from business aviation consultancy and broker Asian Sky Group, by the end of 2024, the number of private aircraft in mainland China, Hong Kong, and Macau had decreased from a peak of 481 aircraft in 2017 to 306 aircraft, a reduction of about one-third.
Reuters pointed out that the decrease in the number of private aircraft in China is mainly due to aircraft being sold, such as the forced sale of aircraft by companies like China Evergrande Group after facing an unprecedented debt crisis in mid-2021.
The report also mentioned that during the same period, driven by India, Australia, and Japan, the number of private aircraft in other countries in the Asia-Pacific region increased by 20%. With the decline in the number of private aircraft in China, countries in Southeast Asia such as Singapore, Vietnam, Laos, Indonesia, and Thailand have seen particularly strong growth in private aircraft, despite their lower base numbers.
Why is the high-end aviation market in the Asia-Pacific region experiencing rapid growth while China is rapidly declining? Professor Fan Jiazhong from the Department of Economics at National Taiwan University, in an interview with Epoch Times, stated that this phenomenon first and foremost indicates that the wealth of China’s top-tier consumers, i.e., the elite class, is shrinking, serving as a strong evidence of China’s severe economic downturn.
Fan mentioned that Beijing authorities have always claimed that their economic growth rate is at 5%, but if it were 5%, such a phenomenon would not occur. This proves that the Chinese Communist Party (CCP) government is lying. People underestimate the CCP’s ability to lie. The outside world may think that when it says 5%, it might be slightly exaggerated, maybe 2-3%, but in reality, it is negative. Only with negative economic growth would such a phenomenon occur, but the extent of the negative growth is hard to determine.
Furthermore, luxury consumption in China is also shrinking. In January of this year, the Economic Observer reported that according to the “2024 China Luxury Market Report” released by research firm Bain & Co., the overall market growth is slowing down, with jewelry and watches performing the worst, with sales decreasing by 28% to 33%. The Chinese luxury market is facing consumption contraction, with estimated sales declining by 18% to 20% in 2024.
Fan mentioned that the economic growth in countries in the Asia-Pacific region is active, averaging around 5% to 7% annually, which will certainly create many top-tier wealthy individuals who will purchase high-end luxury items like houses, yachts, and private aircraft. This indicates that the number of top-tier wealthy individuals is increasing.
According to an analysis by Aviation Week Intelligence Network on March 7, the private aircraft market in the Asia-Pacific region currently only accounts for 7% of the global market, much lower than the North American market. However, the market’s average annual growth rate for the next 10 years is expected to reach 2.1%, higher than the global average of 1.4%, indicating that other markets in Asia are attracting more high-end aviation assets.
According to the latest predictions by the International Monetary Fund (IMF), Malaysia’s GDP growth rate is projected to be 4.7% in 2025, following a GDP growth rate of 5.17% in 2024.
Indonesia’s Central Statistics Agency (BPS) recently announced that the economic growth rate in 2024 was 5.03%, slightly lower than the government’s target of 5.2%. Economists believe that Indonesia’s economy may face resistance this year but is expected to continue growing steadily.
A report by Bloomberg in early January stated that India’s National Statistics Office (NSO) estimated a 6.4% growth in Gross Domestic Product (GDP) for the year ending in March, in line with the median economist forecast.
The decline in the number of private aircraft in China in recent years is analyzed by Reuters as being influenced by economic downturn, government crackdown on flaunting wealth, and the pandemic.
Regarding the economic downturn, Wang Guochen, a researcher at the China Institute of Economics, analyzed for the Epoch Times that the economic decline in China can be divided into two stages: first, when people are unwilling to consume, and second, the current stage where there is clear lack of purchasing power.
Wang stated that for these top-tier wealthy individuals, Xi Jinping’s “common prosperity” policy is another pressure they face. Hence, their first priority is to seek prosperity elsewhere, for example, in countries like Singapore or the United States.
Fan believes that the main reason lies in the structural aspect, stating that China’s previous economic development model was highly distorted.
“You can see that although the GDP growth has been high in the past, there is healthy economic growth and very unhealthy economic growth. China belongs to extremely unhealthy economic growth.”
Fan mentioned that China relied heavily on excessive investments in real estate, which were included in the investment component of GDP. Therefore, the proportion of investment in China’s GDP was much higher than in other countries, and it lasted for a long time. Apart from real estate, there were investments in infrastructure projects like railways, highways, and airports, which were opportunities for local governments to make profits!
“These over-investments do not yield returns. When there are no returns, the real estate bubble bursts. This development model is a stop-gap measure that can only create short-term prosperity. Many experts say that the issue with China’s economy is not cyclical but structural. The turning point has arrived, and the crisis has begun to surface,” Fan said.
CCP leader Xi Jinping attended a private enterprise symposium on February 17 and proclaimed that it was the perfect time for private entrepreneurs to “show their skills.” Some interpreted this move as a strong signal that Beijing would support private enterprises, leading to speculation that in order to rescue China’s economy, Xi Jinping might shift away from the previous policy of “state advancing, private retreating?”
Wang believes that the primary factor affecting China’s economic decline is the “state advancing, private retreating” policy. In reality, Xi Jinping emphasizes the so-called “new productive forces,” channeling most resources to state-owned enterprises or manufacturing, suppressing those in the service or private sectors like Jack Ma.
Regarding the 20% increase in the number of private aircraft in countries in the Asia-Pacific region, Wang stated that it is actually related to China. Firstly, there is capital flight, with both the wealthy and funds moving overseas. This has resulted in two types of Chinese individuals: impoverished mainland Chinese and wealthy overseas Chinese.
Secondly, structurally speaking, Wang mentioned that whether it be Japan, South Korea, or Taiwan, in the past few decades, due to funds continuously flowing into mainland China’s investments, it has caused some hollowness or lack of investment in Japan, South Korea, or Taiwan’s industries, as the funds were flowing out to China.
“Now with the economic downturn in mainland China, these funds are gradually returning to their respective countries, so you can see that Japan has already emerged from its so-called lost 30 years. It is hard to imagine that Japan would face inflation issues now. It is also hard to imagine that Taiwan’s stock market can continue to rise above ten thousand points, even reaching twenty thousand points. So, it is the current decline in mainland China that is causing all normal foreign investments to gradually return to their home countries.”
These funds may further be invested in countries in the “New Southbound” policy direction or other regions through their respective countries. These two reasons are causing other countries to perform much better in terms of private aircraft, as well as stock and foreign exchange markets than mainland China.