The country will lose 13,500 individuals with investable wealth of over $1 million this year, projects migration consulting firm Henley & Partners in its Private Wealth Migration Report, released earlier this week. China will lose more than twice as many millionaires as India, which occupies second place in Henley & Partners’ ranking. Around 10,800 millionaires left China in 2022, and the country has led the world in net outflows of high-net-worth individuals over the past decade. 

China had around 780,000 millionaires at the end of 2022, the firm estimates, making the country the third wealthiest in the world, behind the U.S. and Japan. Yet the growth in the wealthy population has been negligible since 2017, writes Andrew Amoils, head of research at New World Wealth, which worked with Henley & Partners on the report.

In total, the consulting firm projects that 122,000 millionaires will relocate this year, up from 84,000 last year. The U.K. and Russia take third and fourth place respectively in terms of projected net outflows of millionaires. 

Why are millionaires leaving China?

China’s wealthy may be trying to escape regulatory scrutiny by relocating.

In mid-2021, President Xi Jinping announced a campaign to support “common prosperity,” targeting the country’s high level of income inequality. The announcement came alongside an extended regulatory crackdown against some of the country’s largest private companies. 

Calls to spread the wealth have continued even as China now tries to bolster its flagging post-COVID economy. In March, Xi called upon private firms and entrepreneurs to donate to charity and “share the fruits of growth.”

Chinese millionaires were also frustrated with the country’s tough approach to the COVID pandemic, where snap lockdowns and other disruptive measures were imposed to drive cases down to zero.

Ironically, Beijing’s decision to roll back its COVID controls may now be driving the recent outflow. With the end of international quarantine in early January, Chinese millionaires can now travel overseas to check out possible relocation destinations in person.

Where are Chinese millionaires going?

Australia and the United Arab Emirates top the Henley & Partners list of countries expected to attract the most millionaires this year.

Many wealthy Chinese are also looking at Singapore, which sits in third place in the consulting firm’s forecast. 

Chinese elite are attracted to Singapore’s well-developed wealth management sector, its proximity to China, and its connections to Chinese culture.

Singapore’s neutral position between the U.S. and China is also a benefit. Chinese entrepreneurs and businesses have based themselves in the country to avoid American scrutiny over business with China.

Incoming Chinese money is good for the local financial industry. The number of family offices in the city jumped from 400 to 700 in 2021, and those in the industry say interest grew more last year, reports Reuters.

But the attention is also driving up the cost of living. The median private home price in Singapore is now $1.2 million, according to the Urban Land Institute, surpassing Hong Kong. The city also has the highest median monthly rents in the region, coming in at almost $2,600.