Rich people are leaving China in droves. Just ask the South China Morning Post: “Exodus of the super-rich: half of China’s millionaires plan to leave country within five years.” Or the Wall Street Journal: “Almost Half of Wealthy Chinese Want to Leave.” Or Bloomberg: “Almost Half of Rich Chinese Consider Move, Barclays Says.”
Seems convincing, no? Well, no, and I’ll do my best to show why by answering three simple questions.
First, how does Barclays know? The Barclays report, which I received this morning, is called “The Rise of the Global Citizen?” and is published as part of its Wealth Insights series (intended, presumably, to attract clients). For this edition, they interviewed 2000 high net word individuals “all of whom had more than $1.5 million in net worth,” and 200 with more than $15 million in net worth. They come from 17 countries, and 750 self-identify as entrepreneurs. Beyond that we know nothing, but I think it’s safe to assume – based on this information – that the sample taken was not representative of Chinese millionaires as a whole (the sample size would be too small). Rather, it’s representative of Chinese millionaires who don’t mind responding to surveys from investment bankers. Though I’d hate to generalize, in my experience wealth in China tends to be very discreet, and those who are willing to talk about it are unusual and typically have spent time abroad.
Second question: is this correct? Let me preface this answer by noting that I believe Barclays is 100% accurate in reporting its data and are as honest as they come. But that’s not the issue. Rather, the issue is where these rich Chinese would like to move. According to a supplementary press release that I received several hours after the report landed in my inbox, “for China’s wealthy, Hong Kong (30%) is the top destination, followed by Canada.” Now, there are big differences between Hong Kong and Mainland China, but sovereignty is not one of them. That is to say, Hong Kong is a semi-autonomous region of China, and thus moving to Hong Kong as a Mainland Chinese isn’t really moving abroad. Which, if I’m doing the math correctly, means it’s not 50% of rich Chinese who want to leave China in the next five years. It’s actually 34% of rich Chinese who want to leave China in the next five years – if you exclude Hong Kong, which you should.
Which leads us to the third and final question: So what? The 34% of Chinese who want to move abroad (excluding Hong Kong) in the next five years are roughly equivalent to the 34% of high net worth Latin Americans who want to do the same thing (according to the Barclays survey) and the 36% of high net worth Qataris (question: is there such a thing as a low net worth Qatari?). But here’s the real kicker. According to Barclay’s, two-thirds of Hong Kong residents want to stay in Hong Kong “due to economic opportunities.” Which, if my calculations are correct, is roughly the same number of high net worth Mainland Chinese who – according to Barclays – want to stay in China.
In other words, unless you find it interesting that one-third of high net worth Ecuadorans want to leave Ecuador in the next five years, there’s probably nothing in the Barclays report about China that you’d feel compelled to write a headline about.