60% of China’s most Affluent Considering Emigration

Global management consultancy Bain & Company recently published a startling report indicating that the majority of China’s rising affluent classes are considering moving overseas....

Global management consultancy Bain & Company recently published a startling report indicating that the majority of China's rising affluent classes are considering moving overseas. Reasons cited include a mistrust of the government, fear of several market bubbles bursting, intolerable levels of pollution and a desire to have an English-speaking education for their children.

China's economic growth has shown signs of starting to slow after years of overbuilding across the board - industrial capacity, infrastructure, housing, shopping malls and commercial premises - and it would appear that many of China's wealthiest are prepared to leave altogether rather than risk personal fortunes.

Many Chinese have been getting richer and their free-flowing funds are being spent around the world according to several recent research reports. Many newly prosperous citizens are young and experiencing wealth for the first time.

Wealth-X, a Singapore-based company that collects data on ultra-high net worth individuals has predicted that the number of Chinese with more than 3.03bn Chinese yuan ($500m) in assets will grow by 6% this year to 535 people.

It's not just the ultra-rich classes who are swelling. Bain & Company report that the country's high net worth population - people with more than 10m Chinese yuan ($1.6m) - will grow from 800,000 people to around 1 million between now and 2015.

Ironically, the new wealthy classes have made their money from years of over-expansion in China. For most of the last decade, the country's gross domestic product has grown by around 10% each year and it has been mainly business owners that would have taken the most advantage of that rapid expansion.

Now that the period of expansion appears to be cooling, it would appear that many fear re-investing in China, preferring to spend their money overseas.

Increased Chinese investment can be seen all over the world.

Home prices in prime urban areas such as Vancouver, London and New York are soaring in response to the new wave of Chinese buyers. In a recent survey of 3,000 high net-worth Chinese, 30% mentioned real estate as one of the top three investments they'll make overseas.

The principal reason many of China's wealthiest are investing outside of the country is because they are worried that the government could potentially relieve them of their hard-earned assets at some point as their increased wealth also increases their visibility.

In Europe, high net-worth Chinese investors are seeking vineyards, hotels, warehouse s and chateaux indicating an increased appeal in foreign businesses. It is also expected that the lure of permanent residency in countries such as Spain and Portugal - where residency visas are provided to non-EU citizens making qualifying investments - will entice increasing investment from wealthy Chinese for some time to come.

Mykolas Rambus, CEO of Wealth-X comments: "More wealthy Chinese are coming somewhere near you. Whether that's in leisure or in business, we'll see an increased number of Chinese growing businesses, experiencing new places and putting down roots outside of China."

- Friday 23 May 2014

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