Singapore is considered the fourth largest financial center and one of the five busiest seaports globally. Not only does it provide great development opportunities for investors, using Chinese and English, it is also considered one of the ideal escape ports for the rich in China.
Currently, the Singapore government also provides various incentives for the wealthy to invest in the country, such as adults who invest $2.5 million or more can apply for a permanent residence status. That has become the reason China’s millionaires choose Singapore as a destination to transfer wealth.
8 out the 50 richest people in Singapore in 2021 came from China
According to Forbes Asia 2021 list of the top 50 richest people in Singapore, the total wealth of Singapore’s 50 richest people increased by 25%, specifically to $208 billion, thanks to the recovery of the economy and the stock market. Included in the list are eight from China. Their total wealth is $73.56 billion, accounting for 35% of the total wealth of the top 50 richest people.
For example, a financial report revealed that Zhang Yong and his wife Shu Ping, the founders of China’s leading hot pot chain Haidilao, immigrated to Singapore a long time ago when their company was listed on the stock exchange. They were the richest people in Singapore in 2019. Zhang and his wife were still on the Hurun Rich List in 2021 with a net worth of $11.7 billion.
Also immigrating to Singapore were Li Xiting, founder and chairman of Shenzhen Mindray Bio-Medical Electronics, China’s largest medical equipment manufacturer; Jiang Nanchun, founder of Focus Media Holdings; and Ji Qi, founder of Huazhu Hotels Group. It is very clear that while immigrating, these people will be taking a large amount of wealth with them.
This year, there are 10,000 millionaires with $60 billion exiting China; A large number are aiming for Singapore with thousands of applications awaiting approval.
Chinese leader Xi Jinping has used the mantra “commonwealth” to implement acquiring assets from the private sector again. Accordingly, private businesses will have to voluntarily give money to the Chinese Communist Party. The Party promises to use that money to reinvest, do business, and distribute benefits to the poor. This vague prospect of “commonwealth” has forced a large number of wealthy mainland tycoons to emigrate to avoid being targeted by the authorities.
A more relevant cause driving a stronger wave of people and goods fleeing is the zero-COVID policy. The harsh lockdowns, no opportunities to do business, and limited access to food and medical care, are making the Chinese constantly think of fleeing their homeland forever.
In addition, observers say that sanctions imposed on Russian oligarchs during the Ukraine war have made China’s wealthy fear similar restrictions if the CCP invades Taiwan. A professional offered comments on condition of anonymity, that moving to Singapore could create some useful distance from the CCP. Chinese billionaires want to “stop being seen as Chinese,” he explained. “It’s like money laundering. Except you’re washing your own identity.”
The problem is, a place as small as Singapore can hardly absorb all the money escaping from the CCP. The real estate market in Singapore is heating up because of capital flows from China.
Housing prices in Singapore skyrocketed, demand outstripping supply
According to the Financial Times, Vikna Rajah, co-head of business department for private clients at law firm Rajah & Tann, said, “It’s been really crazy this year.” He said his Singapore team is processing inquiries ever week from millionaires wanting to set up a type of private investment firm. And about a third of the requests come from China. A few years ago, the company received only “a handful” of requests each year.
According to data from Property Lim Brothers, in the past two years, the rent for condominiums without any land and apartments has increased by 11%. The rental index recently surpassed its previous all-time high from January 2013, of 134.4 settling at the rate of 136.9 in April.
Here, market data seems to be closely related to the trend of people fleeing the communist regime, and Singapore is the main beneficiary of this capital inflow: Housing prices have increased at a steady, rapid rate since 2020, while wages only increased along standard practices.
In April, Singapore raised the limit for family offices that qualify for tax exemptions on income from their investments. Officials announced that they must invest at least $7.1 million in Singapore, or 10% of their assets whichever is higher. Certain funds will also be required to hire a professional from outside the home. However, asset managers say this doesn’t stop Chinese clients from flying in.
Chinese parents “don’t want to send their kids to the West,”, said one unnamed millionaire and long-time Singapore resident, pointing to growing hostility toward China and racism toward the Chinese in the West. “You cannot go to Hong Kong. Singapore is the most Chinese place you can go to.”
According to the former Singapore official, “If you go and live in a Western country, you are really burning bridges with China. We are friendly enough with China. We are geographically close, we are culturally close. You can call it a ‘China plus one’ strategy. And we are the plus one.”
Hong Kongers also intend to permanently relocate to Singapore?
According to the Singapore Tourism Board, the number of visitors from Hong Kong to Singapore nearly doubled from January to February this year. That number also increased further in March, up more than 110% from February.
According to data from co-living company Hmlet and Far East Hospitality, some guests from Hong Kong are booking rooms for as short as two weeks, while others intend to stay for 12 months.
Giselle Makarachvili, chief executive officer of Hmlet, said that about 80% of Hmlet Homes customers from Hong Kong are families with young children. She said, “According to our observations, most bookings from Hong Kong are for long-term relocation to Singapore.” She added, “We also noted a group of members whose original purpose of travel was for business but eventually switched to a permanent residence.”
According to Tan Chia Hui, head of hotel operations and serviced accommodations, Far East Hospitality has received numerous bookings – from both tourists and businesses looking for temporary accommodation for staff. Their corporate bookings are typically for a period of one to three months, and for larger apartments with two to four bedrooms.
She said, “This shows that while guests may be moving to work, they are also looking to bring their families.”
Co-working company WeWork said its Singapore locations saw sales and inquiries from Hong Kong-based companies increase by nearly 13% in the fourth quarter in 2021 compared to the third quarter.
The population shift toward Singapore makes the Singapore real estate market more bustling and vibrant. Out of the 30 cities surveyed by Savills, Singapore ranked at the top of the list as the city with the fastest increase in rents (8.5 percent) in the first half of 2022, beating out London, San Francisco, Tokyo, and Paris. Hong Kong is at the bottom with negative rental price growth. As money and people in China and Hong Kong choose to flee from the CCP, the economic, financial, and “common wealth” loss will be greater than ever.
Thus, after 40 years of reform and opening up, the private sector contributes more than 50 percent of the tax revenue, more than 60 percent of the GDP, and over 70 percent of the technological innovations. It also provides more than 80 percent of the urban employment and accounts for more than 90 percent of market entities in China. But now Xi wants “Common wealth,” to limit excessive income, to force the private sector to “give” to the state for its crumbling GDP and bursting real estate balloon. So the people are fleeing China and bringing “prosperity” to neighboring countries.