China’s wobbly response to the bursting of its stock market bubble and the mystery over the true health of the country’s economy continue to spook investors, large and small. China’s wealthiest people know exactly what to do in these bewildering times: get some of their money out. With uncertainty rising at home, China’s rich have started looking elsewhere to store their wealth.
“The focus of China’s high net worth families has shifted from making as much money as you can to protecting your wealth,” said Shang Dai, chief executive of Kuafu Properties, a New York-based developer that draws funds from Chinese investors.
60 per cent of wealthy Chinese people surveyed in July said they planned to increase their overseas holdings in the coming two years. Residential property was the most popular future investment, followed by fixed-income securities, commercial property, trust products and life insurance policies. The survey found that 47 per cent of so-called high net worth individuals had earmarked more than 30 per cent of their assets for investment overseas.
The US was the preferred destination for 42 per cent of respondents. Next in line were Hong Kong, Australia, Canada and the UK.
Another trigger for foreign investment is an effort by wealthy Chinese to get foreign citizenship. The survey found that almost a third of respondents bought overseas assets as part of schemes to apply for local passports or permanent residency.