12° Nicosia,
16 June, 2024
Home  /  News

Chinese elite move billions abroad in economic shift

Investors target Tokyo, London, and New York


In a remarkable shift this year, affluent Chinese have moved hundreds of billions of dollars out of the country, capitalizing on the end of COVID precautions that had tightly sealed China's borders for nearly three years.

According to a report on The New York Times, the move involves diverse investments, including overseas apartments, stocks, and insurance policies, reflecting concerns about the sluggish post-pandemic recovery and broader economic issues.

Chinese travelers, now able to fly to global financial hubs like Tokyo, London, and New York, are purchasing apartments in Japan and channeling funds into accounts abroad. This trend suggests unease about China's economic trajectory under President Xi Jinping's leadership, marked by increased government control and business crackdowns.

Some Chinese individuals are circumventing strict government controls on money transfers by resorting to unconventional methods, such as buying gold bars and accumulating foreign currency. Real estate, particularly high-end Tokyo apartments, has become a favored option, with Chinese buyers paying in stacks of cash.

While experts believe the outflow of money does not immediately threaten China's $17 trillion economy, it raises concerns about the country's economic and political future. Large-scale money outflows have historically triggered financial crises in other regions. However, Chinese authorities assert control, maintaining the renminbi's weakness against the dollar to support exports.

The movement of money out of China, while significant, is deemed manageable, according to Wang Dan, chief economist for China at Hang Seng Bank. The government relies on previous restrictions to curb large-scale outflows, maintaining stability in the face of rising global economic challenges.

Chinese families, seeking safer investment options, are employing various strategies to send money overseas. Some are purchasing gold, opening bank accounts in Hong Kong, and wiring money to buy insurance products resembling bank certificates of deposit. These methods reflect a proactive response to economic uncertainties, as families put their savings in assets perceived as more secure.

The evolving landscape of Chinese capital outflows prompts careful observation, with potential implications for both domestic and international financial markets. As affluent Chinese navigate these economic uncertainties, their strategic investments abroad underscore the complexity of managing financial assets amid a changing global economic landscape.

[With information sourced from The New York Times]

Cyprus  |  China  |  economy  |  invest  |  covid  |  abroad

News: Latest Articles

Photo from Cyprus Passion FB page

Stay cool or fry trying!

Meteorologists sound red alert as blistering heatwave brings record 45°C – relief in sight soon
 |  NEWS