High-Net-Worth People Are Leaving China.

Smart money, as the saying goes, is bailing out of China. The country’s millionaires and billionaires are emigrating in record numbers, with 2024 likely to see an out migration of 15,200 such people.

Henley & Partners, an investment migration firm, keeps track of such things and notes that this year’s expected figure is some 10% above 2023’s out migration of 13,800. Add to that the 500 or so high net worth individuals who are expected to leave Hong Kong, the out migration jump is that much greater. America and Singapore will receive most of the flow. There is no way to document how much wealth these people will take with them, but from past trends, Henley & Partners estimates that each migrant will take the equivalent wealth of between $30 million and $1.0 billion.

Reasons migrants state for their move vary, as one would expect, but most mention the uncertainties implicit in China’s current economic situation and how those uncertainties raises questions about future investment returns. The ongoing property crisis and real estate turmoil loom large in this assessment of uncertainty, especially because falling real estate values have hurt household wealth and accordingly left questions about China’s general economic growth prospects. Some, in explaining their decision, reference the downgrading in China’s financial outlook by two credit rating agencies, Moody’s and Fitch. A motivator left unsaid, and for obvious reasons, is the hostility President Xi Jinping has in the past shown to privately owned businesses and personal wealth generally.

Singapore has long been the preferred destination for such migrants. But recently, Singapore has stepped up its scrutiny of inbound Chinese wealth. Even those who have nothing to hide, might prefer to avoid the bother and loss of privacy now implicit in a Singapore haven. Canada and the United States will remain popular alternatives for these Chinese and their money. The United Arab Emirates has also gained popularity, offering, as it does, zero income tax, a luxury lifestyle, and so-called “golden visas” that make the movement of investment funds easy and private. Japan, too, has gained popularity, because of its proximity to China, an attractive lifestyle, and the fact that it can advertise itself as one of the safest countries in the world.

To be fair to China, it is not the only country seeing an exodus of high-net-worth individuals and families. South Korea and Taiwan have also witnessed such departures. In the case of these two countries, security more than economics is the paramount concern. For the former, the belligerence of North Korea looms large. For Taiwan, it is China’s belligerence that prompts people who can to move their life, their assets, and their family out of potential harm’s way. Questions about the willingness of the United States to defend Taiwan have no doubt had effect, especially if Donald Trump moves into the White House in 2025.

China watchers can note two telling messages in this migration news. One is that it makes a clearly negative commentary on President Xi Jinping’s economic management. Second is that the departure of this wealth will make Beijing’s efforts to revitalize China’s economy that much more difficult, though there is no way to quantify the effect.