China faces a major millionnaire exodus this year

China is an economic powerhouse with the second-largest economy in the world.

China faces a major millionnaire exodus this year
An employee counts Renminbi banknotes at a branch of Bank Of China in Changzhi, Shanxi province March 31, 2009. Reuters/Stringer

The backstory: China is an economic powerhouse with the second-largest economy in the world. Its economy has had a pretty steady growth from 2000 to 2017. But, for the past ten years or so, it’s seen many of its US-dollar millionaires head out of the country, migrating to other places as China’s wealth growth begins to slow down, especially for already wealthy individuals.

More recently: When COVID hit China, the economy obviously took a hit – and many of the super-rich weren’t thrilled by the lockdowns and other restrictions. But, it looks like some wealthier people still aren’t too happy with the economy’s performance since the zero-COVID policies have been lifted. At the end of 2022, China had around 780,000 millionaires living there, according to an estimate by consulting firm Henley & Partners. And, since 2021, the Chinese government has been focusing on wealth inequality, pushing for regulations on private companies through a campaign referred to as “common prosperity.”

The development: A report was released on Tuesday from Henley & Partners detailing how China will see the biggest net outflow of millionaires than any other country this year. The Henley Private Wealth Migration Report estimates that China will lose 13,500 high-net-worth people, each with an investable wealth of over US$1 million. In second place is India, which will lose 6,500, and the UK comes in third with 3,200. The report also showed that China lost about 10,800 in 2022. Where are they going? Well, it looks like Australia and the UAE are considered the most attractive places to the rich.  

Key comments:

“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,” Andrew Amoils, head of research at wealth intelligence firm New World Wealth, wrote in the report.  

“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,” said Bill Liu, an agent who advises wealthy Chinese on immigration and buying property internationally.