They went to Singapore; Dubai, United Arab Emirates; Malt; London; Tokyo; and New York, anywhere but their home country of China, where they felt their assets and personal security were increasingly at the mercy of authoritarian rule.
In 2022, an extremely challenging year for China, many Chinese entrepreneurs moved abroad, temporarily or forever. They were part of a wave of emigration that led to one of the biggest online slogans of the year, “runxue,” meaning fleeing China.
A consistent, if privileged, piece of China’s economic puzzle, these people are dumping their wealth and businesses at a time when growth is at its lowest point in decades.
Many of them are still scarred by recent years, during which China’s leadership persecuted the country’s largest private companies, vilified its most celebrated businessmen, decimated entire industries with arbitrary regulations, and refused to budge on the policies of COVID-19 when many companies were struggling. .
Although the tone and policies of the government have become more pro-business in recent weeks, the business class, which has lost income, fortunes and, above all, confidence in leadership, will not be easily swayed.
Now that they have lived free from fear in other countries, they are reluctant to put themselves and their businesses back under the control of the Chinese Communist Party, several of them said during discussions in Asia, Europe and the United States, at least not until they can be sure that the state will have to follow the same laws as the citizens. “When you don’t have a say in how a government makes the rules, you don’t have to stay there,” said Aginny Wang, co. -founder of a crypto banking startup, Flashwire, who moved from Beijing to Singapore in June after getting stuck in Shanghai’s COVID lockdown on a business trip. “There are many other places where you can do things.”
While looking for such a place, many in China’s business elite flocked to Singapore.
In a small office in that city-state’s central business district, JC Huo was constantly taking calls while serving visitors tea on a bamboo tray.
Huo, founder of Lotusia, an advisory firm that handles business registrations and visa applications in Singapore, said his list of Chinese clients had expanded rapidly over the past year. People in the education, gaming, cryptocurrency and fintech industries in China, all targets of government crackdowns in recent years, had sought his services.
During the Shanghai lockdown, his phone lines were “ringing off the hook,” he said. The rich, he said, realized that no matter how much money they had, they still had to scramble for food and supplies under the harsh “zero COVID” restrictions.
Even over the past few weeks, after the Chinese government rolled out the red carpet for the private sector and Hong Kong promised to attract crypto talent from mainland China, Huo has been busy fielding requests.
“Businessmen remain pessimistic,” he said. “As long as people are worried about their assets, they will register their companies in Singapore and put their money here.”
JC Huo, whose company helps companies register in Singapore, in Singapore on October 4, 2022.
For those people, Singapore works because about 3 million of its citizens, or three-quarters, are ethnic Chinese, and many speak Mandarin. They also like that it is business-friendly, global-minded, and above all, that it respects the rule of law.
People in the West may be angry at Singapore’s limitations on individual freedom. But for most Chinese, a government that upholds the rule of law and doesn’t arbitrarily change its policies is enough.
“Singapore will not crack down on a company or industry outside of its legal framework,” said Chen Yong, founder of Pionex, a cryptocurrency exchange, who moved here from Beijing in 2021. “Their policies have more continuity.”
Chen and others I met in Singapore said they had no intention of moving to Hong Kong, despite the city’s enthusiastic attempts to attract people like them in recent months.
For decades, Hong Kong played the role of a safe haven for mainland businessmen due to its autonomy from China. That collapsed after Beijing introduced a national security law on the territory in 2020, which led to the arrest of activists, the seizure of assets, the detention of newspaper editors, the rewriting of school curricula and what many see it as a commitment to judicial independence.
Chen moved to Singapore because cryptocurrency trading, his industry, is banned in China. He has kept some developers in the country, but most of his operations are outside of him. He said that being in Singapore helped him think more globally. And he was skeptical that Hong Kong could separate its crypto policies from those of Beijing.
“When businessmen chose to move to Singapore, it means they chose to leave China,” he said. Hong Kong is not attractive to people who have made that choice, she added.
Singapore has become a strong rival to Hong Kong as a place for China’s super-rich to park their wealth. Four of the 10 richest Singaporeans on the Forbes billionaires list are recent Chinese immigrants. So many people came last year that a startup founder said he had gotten fat from all the homecoming dinners.
The rush of elite Chinese businessmen to Singapore has contributed to a rise in the cost of living here. Median rent for a 1,000-square-foot condo was about $3,500 a month at the end of September, more than a fifth higher than it was at the start of 2022, according to 99.co, a real estate portal. The cost of a license to own a vehicle increased nearly 40% last year.
Singapore also competes with Hong Kong as a place for mainland Chinese companies to register separate entities for their international operations. Some entrepreneurs want to develop their global brands by identifying themselves as Singaporean companies.
To the outside world, “Hong Kong is part of China, while Singapore is not,” said Yu-Ning Liu, founder of Karma Games in Beijing, which develops games played by people around the world.
Liu is moving his operations from Hong Kong to the city-state. He said that he would start using his Singapore entity to launch and market games for international markets.
Singapore has also become something of a buffer zone as geopolitical tensions between China and the United States escalate. For some, a Singaporean passport is attractive because it has good relations with both countries.
Governments around the world are increasingly wary of Beijing’s influence on Chinese companies. Many want to know whether those companies are keeping their citizens’ personal data secure and whether the Chinese entities’ investments have national security implications.
Such scrutiny has prompted some Chinese businessmen to seek foreign passports or at least permanent resident status in other countries. Some said they feared their Chinese passports would leave them vulnerable if China invaded Taiwan, triggering the kind of sanctions imposed on Russia and its businesses since the war in Ukraine began.
Singaporean businessmen admit that it has its limitations. It’s small and expensive, and the talent pool is shallow. It’s an easy place to enjoy life, but not ideal for starting, say, an ambitious tech company, many said. Some wealthy and relatively young Chinese who have moved here don’t have much to do except drink a lot of Moutai, the Chinese liquor.
Almost everyone would have preferred to stay in China if the circumstances had been different. It’s a colossal market with great infrastructure, the best supply chain in the world, and a plentiful supply of programmers willing to work overtime.
Most of them still maintain some business operations there. But they won’t rush back, invest more, and open new businesses just because the government cajoled them.
“Entrepreneurs no longer dare to take risks,” Huo said. “They have to think twice before doing something, if it will jeopardize their safety.”