Henley & Partners estimates that about 10,000 wealthy Chinese people will emigrate to other countries this year, taking $48 million. ET Chinese version cited experts saying this will create a social crisis in China.
Explaining the reason for this phenomenon, China expert Tang Jingyuan told ET that the Chinese Communist Party (CCP) is currently emphasizing the development of state-owned enterprises, so private enterprises are left behind.
Tang said that the CCP’s warrior diplomacy has made China increasingly isolated. Politically, the country is increasingly being North Koreanized. Economically, China is increasingly returning to a planned economic model. The situation makes the rich feel they have lost development space in China.
Tang added that CCP promotes a “commonwealth.” The power controlling China wants to use laws, taxes, and other tools to manage the wealth of the rich, including the middle class. As a result, China’s entire rich and middle class feels unprecedented panic. They found that their assets were not secure.
Tang believes that the CCP’s Zero-Covid policy of lockdowns as a basis for epidemic prevention and control was an important trigger for the wealthy Chinese to flee to foreign countries.
Professor Xie Tian from the USC Aiken School of Business told ET that netizens in China estimated that at least 3,000 to 5,000 people fled Shanghai shortly after the city lifted the lockdown.
Xie Tian explained that people fled Shanghai because they realized how fragile their fortunes were in the face of the CCP’s power. With only an epidemic prevention policy, the controlling regime could deprive them of freedoms, basic livelihoods, and human rights.
Tang Jingyuan analyzes that in the short term, the emigration of the rich will take a lot of wealth away from China in a very short period, directly impacting the foreign exchange system of China’s controlling regime.
In the medium term, when the flow of wealthy people fleeing China forms, the base of social wealth that mainlanders can share will decrease.
With the massive transfer of wealth, investment and employment opportunities for Chinese enterprises will also rapidly decrease. As a result, the gap between rich and poor in the world’s most populous country will widen.
In the long run, the brain drain from the rich will lead to a shortage of intellectual and innovative resources, and the development of Chinese society will be significantly limited.