[Beren]

Chinese Millionaires Are Leaving The Country In Droves


Robert Frank, CNBC
JAN. 17, 2014, 1:15 PM

Do the wealthy Chinese know something we don't?

A new report shows that 64 percent of Chinese millionaires have either emigrated or plan to emigrate—taking their spending and fortunes with them. The United States is their favorite destination.

The report from Hurun, a wealth research firm that focuses on China, said that one-third of China's super rich—or those worth $16 million or more—have already emigrated.

The data offer the latest snapshot of China's worrying wealth flight, with massive numbers of rich Chinese taking their families and fortunes overseas. Previous studies show the main reasons rich Chinese are leaving is to pursue better educations for their kids, and to escape the pollution and overcrowding in urban China.

(Read more: 10 of the priciest views in America)

But analysts say there is another reason the Chinese rich are fleeing: to protect their fortunes. With the Chinese government cracking down on corruption, many of the Chinese rich—who made their money through some connection or favors from government—want to stash their money in assets or countries that are hard for the Chinese government to reach.

According to WealthInsight, the Chinese wealthy now have about $658 billion stashed in offshore assets. Boston Consulting Group puts the number lower, at around $450 billion, but says offshore investments are expected to double in the next three years.

A study from Bain Consulting found that half of China's ultrawealthy—those with $16 million or more in wealth—now have investments overseas.

The mass millionaire migration out of China is also hitting luxury companies hard. Hurun said China's luxury sales last year fell 15 percent—the biggest drop in over a half a decade. Spending on gifts, which made up a sizable portion of luxury sales, fell 25 percent.

Bentley Motors last week said that its sales in China slowed last year in part because of "the migration of high net worth individuals from China."

(Read more: Super-luxury car sales fell in 2013. Blame China)

In other words, it isn't that wealthy buyers in China are spending less—they're just disappearing.

Most are looking for permanent residences, Hurun said. The United States was their top destination, which any real estate agent in San Francisco, Seattle or New York can confirm. Europe is their second favorite destination, followed by Canada, Australia, Singapore and Hong Kong.

Just one more reason why the country will have to change its totally corrupt state-capitalism pretty soon.

Another reason they leave might be:



China starts televising the sunrise on giant TV screens because Beijing is so clouded in smog

Gallery

[HoniSoit]

There is a widely shared sense that China's political economic system is at the most fundamental level unstable, and this is felt at daily level by the arbitrary exercise of power. From another perspective, the economic elite in China really has no representation in the political system despite having many incorporated into the Communist Party, explaining why they feel their wealth is not protected.

[foxdemon]

^
I might add that there is a historical poltical divid between the merchantile wealthy people of the coastal cities and the rural majority. After the white devils turned up, China became divided in this way with the coastal traders finding they had more in common (in terms of poltical interests) with the white devil merchants than they did with their country cousins.


While China has open trade with the rest of the world this divide will exist. It seems China's nova rich think they can hadge their bets and set themselves up outside of China. However the now global Chinese super wealthy will ultimately find that there is no sustitue for a nation of one's own (as the Jews discovered leading to Zionism). Market dominant ethnic minorities will always be vunerable to popularist masss movements.