Slowing Wealth Growth in China
China’s rapid economic growth over the past two decades has created a significant number of millionaires. In recent years, however, the country’s wealth growth has gradually slowed. Given the low base that the COVID-19 closures in the previous year caused, China’s growth of 6.3% in the second quarter fell short of expectations. This underwhelming performance has increased pressure on China’s leaders to address short-term economic challenges and develop long-term solutions.
Economists predict that China’s growth will be around 5% in 2023, with even slower rates expected in the future. While China averaged 7% growth over the past decade and more than 10% in the 2000s, the current slowdown has exposed structural weaknesses in the economy.
Political Controls and Regulatory Scrutiny
President Xi Jinping’s push for “common prosperity” and income equality has led to increased regulatory scrutiny and tighter controls on China’s private sector. The government’s crackdown on some of the country’s largest private companies, combined with calls to spread wealth and donate to charity, has created an uncertain business environment for Chinese entrepreneurs. Many wealthy individuals perceive these measures as a threat to their financial success and are seeking more favourable conditions in other countries.
Prolonged COVID-19 Restrictions
The prolonged COVID-19 restrictions in China have also played a role in the growing desire of millionaires to live abroad. The strict lockdowns and disruptive measures imposed by the government to control the pandemic have frustrated the elite. These measures, aimed at reducing the number of COVID-19 cases to zero, have caused economic disruptions and hindered business activities. As a result, wealthy individuals are now considering relocating to countries where the pandemic has been better managed and where they can enjoy more freedom and stability.
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Destinations of Choice for Chinese Millionaires
As Chinese millionaires seek new opportunities and a change in lifestyle, several countries are poised to benefit from this exodus. Australia and the United Arab Emirates (UAE) are expected to be the top destinations for Chinese millionaires in 2023. Australia’s stable economy, high standard of living, and attractive investment opportunities make it an attractive choice. The UAE, with its business-friendly environment and tax benefits, is also a preferred destination. Singapore, known for its well-developed wealth management sector and proximity to China, ranks third on the list of attractive destinations for Chinese millionaires.
