China’s millionaires keep leaving, but now outflows may be ‘more damaging than usual’
- While the annual exodus of US-dollar millionaires is nothing new for China, the conditions under which they are now leaving are unique and raising red flags
- Millionaires are also leaving Russia and India, but which countries are the world’s wealthy most keen on immigrating to?
China will once again see the world’s biggest annual outflow of US-dollar millionaires, according to a new forecast for this year that comes amid subdued economic conditions, lingering fallout from the pandemic, and poor relations with some of its major trading partners.
Advisory firm Henley & Partners estimates that mainland China will lose 13,500 high-net-worth individuals – those with investable wealth totalling more than US$1 million – followed by India’s 6,500. The UK, in third, will lose 3,200 such individuals, predicts the London-based investment migration consultancy.
In 2022, China lost 10,800 high-net-worth individuals, followed by Russia’s 8,500 and India’s 7,500, according to data in the “Henley Private Wealth Migration Report 2023” released on Tuesday.
Among the countries considered most attractive to wealthy individuals, Australia took the report’s No 1 spot and is expected to see an inflow of 5,200 high-net-worth individuals in 2023, followed by the United Arab Emirates’ 4,500.
General wealth growth in China has been slowing … recent outflows could be more damaging than usual
As it has for the past decade, China continues to lose the most dollar millionaires to migration, Henley & Partners said.
“General wealth growth in China has been slowing over the past few years, which means that the recent outflows could be more damaging than usual,” said Andrew Amoils, head of research at wealth intelligence firm New World Wealth, in the report.
Bill Liu, an agent from Guangdong province who advises wealthy Chinese on immigration and buying property overseas, expects 2023 and 2024 to be “big” for immigration.
Many of Liu’s clients say they are disappointed with the recent economic performance following China’s sudden end to its strict Covid controls, and are concerned with the value of Chinese assets.
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“Among the families that consulted us before, about one out of 10 eventually [left China], but now the ratio has risen to two or three [out of 10], doubling what we had before,” Liu said, adding that the immigration-consulting sector has become more competitive of late.
The visa-application process typically costs wealthy individuals at least tens of thousands of US dollars, depending on various factors, according to widely available online quotes.
Europe remains a popular destination for China’s rich, but countries such as Portugal and Ireland are ending their investment-linked visa programmes, while Greece has doubled its investment threshold to 500,000 euros (US$540,250) for obtaining a visa by investing in its real estate market.
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“The investment residency programmes in Europe are still very popular, and the rich in China are treating it as a ticket on a rescue boat. Their wealth is still concentrated in China. In the event of a worsening situation, they have one more option,” Liu added.
The US’ start-up and employment visa programmes, including “national interest waivers” (NIWs) under the green-card application process, are also popular among Chinese tech, medical and academic professionals and researchers, especially those impacted by the downturn in China’s tech sector, Liu said.
“They pay attention to opportunities for skilled immigration from Singapore and the United States,” Liu explained, adding that his goal is to accept 30-40 NIW and “extraordinary ability” visa applications this year.
The report also said that America is notably less popular among migrating millionaires today than it was before the pandemic, perhaps owing in part to the threat of higher taxes.
Hong Kong ultra-rich population fell in 2022, Singapore in top 10: Knight Frank
However, the US still attracts more high-net-worth individuals than it loses to emigration, with a net inflow of 2,100 projected for 2023 – a significant drop from 2019 levels, which brought a net inflow of 10,800 millionaires.
Last month, another wealth report produced by New York-based Altrata, citing data from its Wealth-X division, also showed that China saw a decline in its billionaire population by 11 per cent, to 357. And the aggregate value of their wealth diminished by 9.3 per cent, to US$1.3 trillion.
Sluggish economic growth, a slump in the real estate market and a crackdown on the technology industry had weighed on the values of Chinese assets, Altrata said.
Hong Kong is expected to lose 1,000 high-net-worth individuals in 2023, according to the Henley & Partners report, after 2,400 left the city last year.
