For Isaac, a Chinese business consultant in his late 20s, Xi Jinping’s impressive power consolidation at last month’s Communist Party convention was the last straw.
The graduate of a top Beijing university, who did not want to be identified for fear of reprisals, is looking for work in the Middle East. Like most of his generation, he is an only child. His parents are “too old” to go with him, but they’re glad he moved out at the end of the summer.
“If there is hope for change [after Xi] I will consider returning,” he said. “Until then, I’m looking for opportunities in other countries.”
Isaac is among a crowd of wealthy Chinese fleeing the world’s most populous country just as Xi begins an unprecedented third five-year term. Some of the resignations cite the difficult business environment, while others fear the direction of future government policy.
Singapore has emerged as a number of preferred locations for wealthy Chinese looking for a safe haven for families and wealth.
The October Communist Party convention marked a turning point in how the country’s elite view China’s future, according to interviews with expatriates, as well as lawyers, immigration experts and consultants who work with wealthy Chinese.
However, due to Beijing’s strict border and capital controls, escape attempts are associated with immense personal and financial risks. Even Chinese nationals who successfully make the journey to life abroad remain exposed to Xi’s extra-legal security forces.
“In China they are playing for a draw. If you pull the trigger here and screw up, that’s it. We’re talking about travel bans, confiscations, money disappearances,” said David Lesperance, a Europe-based lawyer who helps wealthy families leave China.
While Hong Kong has been a base of operations for China’s wealthiest for generations, and many including Alibaba founder Jack Ma have bought homes in the city, its security facade has been shattered by Beijing’s crackdown.
Wang Jue, a 35-year-old art collector and investor from Chengdu, southwest China, is among those moving some assets from Hong Kong to Singapore through a family office, a private entity that manages a family’s wealth.
While China and Hong Kong have been hampered by tight coronavirus controls for the past three years, Singapore’s economic and political stability and ease of capital flow made it “the best base to move into the region,” he said.
There have been no “street riots” in the Southeast Asian city-state, Wang added, citing the anti-government protests in Hong Kong in 2019.
Camilla Jiang, a director at Prime Asia Asset Management in Singapore, said she had set up seven Chinese family offices in the past year. She also noted Singapore’s cultural appeal — Chinese Singaporeans make up about three-quarters of the city-state’s population.
“We have a client who spent a year in three locations. . . They chose Singapore because of demographics, she said. “You feel like you can be a part of society.”
Ahead of Congress, many wealthy Chinese were already preparing for Xi’s increasingly authoritarian rule and sweeping crackdowns to transform the country’s business landscape.
Lawyers and immigration experts said some wealthy Chinese clients have already made exit plans. These include establishing new citizenships for themselves and family members, and moving capital and assets to other jurisdictions.
The wealthiest can also use immigrant investment programs offered by some countries to attract the ultra-rich, although the process can take years.
For others who misjudged the pace of change under Xi, speed is now of the essence.
Philippe May, chief executive of investment migration firm EC Holdings, said the most common request from China is “quick for a second passport”.
“We’re talking about a few months. It’s psychological,” he said.
Such customers are often directed to Caribbean countries such as St. Kitts and Nevis, Dominica and Antigua and Barbuda.
While wealthy Chinese have been buying prime assets abroad for years, Keir Waddell, head of London new home sales for property group Strutt Parker, said there was “market talk” about a surge of Chinese buyers in the UK.
“We’re seeing this interest mainly in the prime (£5m+) and super-prime (£10m+) markets,” he said, adding that the “pound so weak” is helping attract foreign buyers to attract.
But efforts to move cash out of China have also contrasted with Beijing’s crackdown on capital flight.
“Everyone says it is difficult to get money out of China at the moment. Banks are wary of moving large amounts of money overseas,” said a Chinese tech entrepreneur who relocated to the United States in September.
“I have funds, but my Chinese bank is taking a very long time to verify the transfer,” said the person, who asked not to be identified, also for security reasons.
The exodus has also shone a spotlight on a murky area of legal protections afforded to Chinese nationals in other jurisdictions. Under Xi, the reach of China’s surveillance and security apparatus has expanded abroad, drawing accusations from the US and others of coercion, forced repatriations and kidnappings from foreign soil.
Margaret Lewis, a China expert and law professor at Seton Hall University, said pressure from Beijing to return Chinese nationals or assets is “messy” for foreign governments.
“There are real questions,” she said. “Just because there are words on paper [in China] that’s called law. . . Who are you sending back? Are you sending someone back?”
https://www.ft.com/content/39f71469-32dc-496d-ab04-ea8d0e76279b China’s elite seek safety abroad