BEJING: China has witnessed a record high-net-worth individual (HNWI) exodus in 2024 due to various factors, primarily the economic slowdown, and it is likely to get worse in 2025 due to the tariff imposed by the Donald Trump government.
Even before Trump came, the financial instability due to sluggish manufacturing activity, property crisis and subdued demand had led many rich Chinese people to relocate to other countries.
Jane Meng, an owner of an import-export company, moved from Shanghai to Hong Kong after she lost trust in the Chinese financial system. She even opened up a bank account in Singapore to which she has moved much of her assets.
“I don’t want to have too much of my money in China because I feel like in a lot of ways, China is not in a good place right now,” she said.
The number of billionaires in China fell to 427 in 2024 from 520 a year ago, according to the report of the Swiss bank UBS. Observers blamed the authoritarian governance of Chinese President Xi and his advocacy of ‘common prosperity – seeking the super-rich to return money to society– for adding to the fears of the wealthy people.
“President Xi Jinping is unfortunately an incompetent leader when it comes to the economy,” said Junhua Zhang, Senior Associate at the Brussels-based European Institute for Asian Studies. “For wealthy people, if they cannot generate more wealth in the country, then the only solution is to change their location.”
Henley & Partners, a global consultancy specializing in investments for HNWIs, estimated that China has had the highest number of millionaires leaving the country in 2024.
“China is again on track to be the biggest millionaire loser globally, with an anticipated net exit of 15,200 HNWIs this year (compared to 13,800 in 2023),” it said in its Wealth Migration Report 2024.
The dreadful implementation of the Zero Covid policy, Xi’s push for the ‘common prosperity’ programme, and the desire to live a better and fearless life have contributed to the Chinese super-rich people’s exodus.
“This great millionaire migration is a canary in the coal mine, signaling a profound shift in the global landscape and tectonic plates of wealth and power,” said Dominic Volek Group Head of Private Clients at Henley & Partners.
These HNWIs mostly migrated to the US, Canada, and Singapore against the backdrop of China’s sluggish economic trajectory and growing geopolitical tensions. The International Monetary Fund (IMF) has already put the Chinese economy in the ‘high uncertainty’ zone.
The shocks the Chinese economy received in the aftermath of the Covid pandemic are still felt in China. Even the number of billionaires has seen a significant drop as China’s growth cycle struggles to rebound.
China lost 142 billionaires in 2024 alone and a total of 432 since 2021, according to a study by the China-based Harun Research Institute.
China lost one-third of its billionaires in the past three years. “The Hurun China Rich List has shrunk for an unprecedented third year running, as China’s economy and stock markets had a difficult year,” said Rupert Hoogewerf, Hurun Report Chairman and Chief Researcher. China’s aggregate billionaire wealth has shrunk by 5 percent every year since 2020.
The regulatory crackdown on big companies by the government is one major reason for the super-rich to relocate, said Guonan Ma, senior fellow at Asia Society Policy Institute’s Center for China Analysis.
“(The crackdown) might have scared off some local private entrepreneurs who may wish to seek safer harbours away from home,” he said.
The disappearance of the billionaire banker Bao Fan led to uneasiness among the HNWIs in China. Meng said it was not safe in China in the wake of what happened to Bao.
“The situation is just too unstable. I am just one small business owner, but I know that a lot of much more wealthy people with a lot more assets are considering leaving China too,” she said.
While the Beijing government has been planning strategies to cope with the imposition of high tariffs by the US, the super-rich in China have given preference to relocation.
This has driven the government to go slow on audits, inspections, seizures of assets, and production halts. This is aimed at stopping the super-rich from leaving the country. But the outflow continues.
Several Chinese businessmen have shifted their factories outside China to avoid US tariffs. This is likely to see to it that these Chinese businessmen seek residency or citizenship in the new locations.
“We’re seeing a lot of our (China) onshore clients – the small and medium enterprises – looking to go outside of China,” said Judy Hsu CEO of Standard & Chartered’s Wealth and Retail Banking.
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