10,000 Millionaires Flee from China Taking with Them a Total Asset of US$48 Billion

Henley and Partners, a world-renowned investment immigration consulting firm, estimates that about 10,000 millionaires will move out of China in 2022, taking with them about US $4.8 million per capita and a total of US $48 billion from China. The loss will be the second largest in the world after Russia. Hong Kong is expected to lose 3,000 millionaires by 2022. The great escape was caused by systemic factors of the communist regime. Rich Chinese who are known to have immigrated overseas include the following. According to a US-based China expert, the CCP, or the Chinese Communist Party, is now emphasizing the need to strengthen state-owned enterprises by pushing back on private enterprises. They see the private sector as a threat to the Communist Party's public economy This is the main factor for the riches leaving China. He said, To strengthen the regime's security, the CCP began a regulatory storm to rob private giants such as Alibaba. It has, in fact, completely disrupted the market economy. The Communist Party also promotes common prosperity, using laws and taxes to squeeze the rich people, including the middle class. It makes the entire wealthy and middle class feel an unprecedented sense of fear that their property security is no longer guaranteed. The CCP's zero COVID lockdown scares away the rich. Bloomberg said that Shanghai's lockdown has left a psychological trauma for many people. Many rich people feel that future situations will be harsher so they try to leave when they can. Mainland netizens estimate that at least 3,000 to 5,000 people have fled from Shanghai. A legal expert at the China University of Political Science and Law said that all of China was like a dangerous wall that could collapse at any moment, and everyone who can and wants to leave should as soon as possible. He said, This reflects a cruel reality. That is, the storm is about to come. Through the dynamic zero COVID policy, many people have experienced the various negative impacts and damage brought by the CCP's authoritarian dictatorship to social life. They see no hope and feel that if they stay in China, they would become lambs to the slaughter sooner or later. Su Mi, a Shanghai-based immigration consultant, said that clients who had been hesitant to immigrate have finally made up their minds due to the extreme epidemic prevention and control measures from the Chinese government. Mr. Hu, a 46-year-old owner of an upscale restaurant in Shanghai, recently sold his shareholding of about 20 million RMB. He hired an immigration lawyer and wealth management consultant, hoping to leave China with his money. But it has been more than a month since Mr. Hu submitted his visa and passport renewal applications, and he has not received a reply. Can you imagine, he said, In this most developed city in China, I almost starved to death when the lockdown started in the city. I'm very sad and it's time to go. Factors behind the escape of wealthy people's assets A large number of wealthy people who have fled have generally transferred their assets abroad through overseas investments, property purchases, or offshore trusts. According to an annual report by the American National Association of Realtors, Chinese buyers remain the number one foreign buyer in the US for residential sales at 6.1 billion, with nearly 60% of Chinese buyers buying in full cash. The average price of their purchase exceeds 1 million, with nearly one third of them buying in California. Hsieh Tien, a professor at the Aiken School of Business at the University of South Carolina, said that in fact, not only in California, but also in the eastern part of the US in places like New Jersey, New York, Connecticut, and Vancouver, Canada, there were many Chinese buying houses with cash. He said, These funds are often made up of the gray incomes of corrupt officials or officials who use their power for personal gain. For example, a village bank with RMB 40 billion in deposits used 20 billion to bribe senior Communist Party officials, all of whom were members of the Politburo Standing Committee or their families, and another 10 billion to bribe local government officials, leaving only a few billion behind. In the end, there was no way to pay off the 40 billion in deposits. After these corrupt officials got the money, many of them transferred the money overseas through fake investments via an underground money market. Communist officials feel the crisis. It will be more difficult to move assets out of China. As is widely known, people in the CCP system have long realized that there is no future for the Communist Party. Many high-ranking officials and wealthy people have already moved their wives, children, and assets overseas. They are known as naked officials. They can leave this sinking ship with a flight ticket as soon as there is any sign of trouble. Former Beijing Normal University associate professor Li Yuanhua said, For example, Yang Jiechi's wife is in Washington DC, and his daughter is also in Washington. He is a high-ranking CCP official who is a member of the state council and a vice premier. Why are his wife and child living overseas? It's because they know it's not safe in China. In fact, the future will be even tougher in China. Since the end of 2020, the CCP has been restricting citizens from leaving the country on the grounds of epidemic prevention and tightening the approval of entry and exit documents. It is also becoming increasingly difficult for Chinese people to move their money overseas, as they only have an annual foreign exchange quota of US$50,000. Li Jianping said, They want to transfer their assets out. In fact, it's becoming more and more difficult to do so. Now, this channel has been controlled more strictly. In the future, I'm afraid that it won't be easy to transfer assets out of China, even if it's 100% legal and legitimate. The fleeing wave will accelerate the social crisis in China. Tang Jingyuan analyzed that in the short term, the concentrated migration of wealthy groups will take away a large amount of wealth in a very short period of time. The rapid transfer of foreign assets in the short term will have a direct impact on the CCP's foreign exchange system. It endangers and even shakes the foundation of China's foreign reserve. In the medium term, if capital outflow becomes significant, the base of social wealth that people in China can share will diminish. With the massive transfer of assets, the investment and employment opportunities for mainland enterprises will also decrease rapidly, and the inevitable result will be the widening of the income gap in mainland China. In the long run, the brain drain will cause a shortage of innovation and intellectual resources in society, limiting its development and even leading to social decline. He said, In a society where there is a loss of wealth, knowledge, and elite groups, it means that there is a serious crisis in the society. The departure of the backbone of society in turn contributes to the acceleration of the crisis so that it will form a vicious circle. I think this is the single biggest impact of all from the riches leaving China.