China’s crackdown on education, property leave wealthy in crisis mode, and some are looking for an escape route

Beijing’s ‘common prosperity’ movement calls for citizens to share the wealth, but attitudes towards recent dramatic changes have diverged among different social classes and ages

Studies suggest that investor sentiment is becoming more cautious in China, and the public’s willingness to give birth remains sluggish

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China’s “common prosperity” movement, which calls for citizens to share in the opportunity to be wealthy, has prompted wealthy individuals to look for ways to keep their money off the government’s radar. Photo: AFP

Published: 12:00pm, 14 Nov 2021Updated: 9:20pm, 14 Nov 2021

Wealthy and middle-class Chinese families have long shared a common perception of what constitutes a successful life.

At the forefront of those criteria are the ownership of a home – an asset that will continue to appreciate – and the means to provide their children with a better education than most of their peers receive, with an eye on being admitted to a prestigious university.

But recently, cracks have appeared in the foundation that underpins those beliefs and goals. The year’s third quarter saw a broader decline in housing prices – spreading from third- and fourth-tier cities to the suburbs of first-tier cities – as well as a crackdown on off-campus education.

For the wealthy, the “common prosperity” movement, which calls for citizens to share in the opportunity to be wealthy, has prompted them to look for ways to keep their wealth off the government’s radar. Under new tax requirements that will come into effect next year, the high-income middle class will have to pay a personal income tax of up to 45 per cent on their year-end bonuses.

At the same time, the nation’s newborn population has plummeted by 40 per cent in the past five years (from 18 million in 2016 to 12 million in 2020), and authorities are pulling out all the stops to convince people to have children.