WEALTH MANAGEMENT
An Air China plane at Beijing's international airport. China is seeing record outflows of rich citizens, research shows, potentially adding to the strain on the economy.
© Reuters PAK YIU, Nikkei staff writer June
18, 2024 18:00 JST
NEW YORK -- China saw the world's biggest outflow of high-net-worth individuals last year and is expected to see a record exodus of 15,200 in 2024, dealing a further blow to its economy, a new report says.
Uncertainty over China's economic trajectory and geopolitical tensions are top of mind for many Chinese millionaires, in dollar terms, who choose to leave their country, according to the report by investment migration firm Henley & Partners. The U.S., China's international archrival, stands out as the top destination, according to the researchers.
China last year saw 13,800 high-net-worth individuals depart, mostly to the U.S., Canada and Singapore, the firm found. Such individuals, abbreviated as HNWIs, are defined as those with at least $1 million in assets.
Henley & Partners said it was difficult to know how much wealth was taken with the emigrants, but "in our experience the HNWIs that normally move most are the ones with between $30 million and $1 billion in wealth," said Andrew Amoils, head of research at New World Wealth, a wealth intelligence firm that collaborated with Henley & Partners on the report.
The large number of rich Chinese heading elsewhere could add to the strain on the nation's fragile economy. A prolonged property crisis has sunk large developers and badly dented the country's wealth, while weighing on debt-laden local governments. The International Monetary Fund earlier this year said the China faces "high uncertainty" due to the real estate turmoil. Fitch Ratings downgraded China's sovereign credit outlook to negative in April, following a similar move by Moody's Investors Service last December.
Rich Chinese paused their efforts to move themselves and their fortunes offshore during the COVID-19 pandemic, but quickly resumed their emigration after draconian restrictions on travel were lifted.
The report does not give exact numbers for migration to the U.S. nor the reasons for those who moved there.
Immigration consultants and analysts have also observed a sharp increase in inquiries from Chinese people, both rich and middle class, looking to move to Japan. "The lifestyle in Japan is very appealing with beautiful public gardens and golf courses, plus it's ranked among the safest countries on earth according to the Global Peace Index," Amoils said.
Singapore has traditionally attracted rich Chinese due to its proximity to China, cultural links and use of Mandarin. But the city-state has stepped up scrutiny of inbound Chinese wealth. Singapore recently denied two Chinese individuals permission to set up a family office, a common way to acquire citizenship, after a money laundering scandal.
The United Arab Emirates remains the most attractive destination for the world's rich with its zero income tax, luxury lifestyle and "golden visas" for investors, the investment migration firm said.
As for other places seeing outflows, Hong Kong lost around 500 high-net-worth individuals last year, amid growing concerns over freedom as authorities crack down on dissent. Henley and Partners does not expect much of a change in the trend this year.
The U.K. is expected to see the second-biggest net loss in 2024 after China this year, at 9,500.
South Korea is projected to see a net outflow of 1,200, while Taiwan is forecast to lose 400. Hannah White, CEO of think tank Institute for Government in London and who provided analysis for the report, partly attributes these flows to uncertainty over the U.S. election in November and the potential for a second Donald Trump presidency. His isolationist rhetoric has raised concerns that his administration may be less likely to defend Taiwan in a military crisis with China, or support South Korea in a contingency with North Korea.
Dominic Volek, group head of private clients at Henley & Partners, said 128,000 millionaires are expected to relocate globally in 2024, a record for wealth migration.
"As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty and social upheaval, millionaires are voting with their feet in record numbers," Volek said. "In many respects, this great millionaire migration is a leading indicator, signaling a profound shift in the global landscape and the tectonic plates of wealth and power, with far-reaching implications for the future trajectory of the nations they leave behind or those which they make their new home."
China to see biggest millionaire exodus in 2024 as many head to U.S.
'Perfect storm' of tensions and uncertainty spurs record global wealth shift, report shows
An Air China plane at Beijing's international airport. China is seeing record outflows of rich citizens, research shows, potentially adding to the strain on the economy.
© Reuters PAK YIU, Nikkei staff writer June
18, 2024 18:00 JST
NEW YORK -- China saw the world's biggest outflow of high-net-worth individuals last year and is expected to see a record exodus of 15,200 in 2024, dealing a further blow to its economy, a new report says.
Uncertainty over China's economic trajectory and geopolitical tensions are top of mind for many Chinese millionaires, in dollar terms, who choose to leave their country, according to the report by investment migration firm Henley & Partners. The U.S., China's international archrival, stands out as the top destination, according to the researchers.
China last year saw 13,800 high-net-worth individuals depart, mostly to the U.S., Canada and Singapore, the firm found. Such individuals, abbreviated as HNWIs, are defined as those with at least $1 million in assets.
Henley & Partners said it was difficult to know how much wealth was taken with the emigrants, but "in our experience the HNWIs that normally move most are the ones with between $30 million and $1 billion in wealth," said Andrew Amoils, head of research at New World Wealth, a wealth intelligence firm that collaborated with Henley & Partners on the report.
The large number of rich Chinese heading elsewhere could add to the strain on the nation's fragile economy. A prolonged property crisis has sunk large developers and badly dented the country's wealth, while weighing on debt-laden local governments. The International Monetary Fund earlier this year said the China faces "high uncertainty" due to the real estate turmoil. Fitch Ratings downgraded China's sovereign credit outlook to negative in April, following a similar move by Moody's Investors Service last December.
Rich Chinese paused their efforts to move themselves and their fortunes offshore during the COVID-19 pandemic, but quickly resumed their emigration after draconian restrictions on travel were lifted.
The report does not give exact numbers for migration to the U.S. nor the reasons for those who moved there.
Immigration consultants and analysts have also observed a sharp increase in inquiries from Chinese people, both rich and middle class, looking to move to Japan. "The lifestyle in Japan is very appealing with beautiful public gardens and golf courses, plus it's ranked among the safest countries on earth according to the Global Peace Index," Amoils said.
Singapore has traditionally attracted rich Chinese due to its proximity to China, cultural links and use of Mandarin. But the city-state has stepped up scrutiny of inbound Chinese wealth. Singapore recently denied two Chinese individuals permission to set up a family office, a common way to acquire citizenship, after a money laundering scandal.
The United Arab Emirates remains the most attractive destination for the world's rich with its zero income tax, luxury lifestyle and "golden visas" for investors, the investment migration firm said.
As for other places seeing outflows, Hong Kong lost around 500 high-net-worth individuals last year, amid growing concerns over freedom as authorities crack down on dissent. Henley and Partners does not expect much of a change in the trend this year.
The U.K. is expected to see the second-biggest net loss in 2024 after China this year, at 9,500.
South Korea is projected to see a net outflow of 1,200, while Taiwan is forecast to lose 400. Hannah White, CEO of think tank Institute for Government in London and who provided analysis for the report, partly attributes these flows to uncertainty over the U.S. election in November and the potential for a second Donald Trump presidency. His isolationist rhetoric has raised concerns that his administration may be less likely to defend Taiwan in a military crisis with China, or support South Korea in a contingency with North Korea.
Dominic Volek, group head of private clients at Henley & Partners, said 128,000 millionaires are expected to relocate globally in 2024, a record for wealth migration.
"As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty and social upheaval, millionaires are voting with their feet in record numbers," Volek said. "In many respects, this great millionaire migration is a leading indicator, signaling a profound shift in the global landscape and the tectonic plates of wealth and power, with far-reaching implications for the future trajectory of the nations they leave behind or those which they make their new home."
