Investments

Wealthy Chinese Investors Getting More Conservative

Thanks to the trade war between the U.S. and China and a slowing economy in China, some of the richest investors in the country are gearing up to adopt a more conservative approach to investing.

Barron's, citing research from Hurun Research Institute, said of the 465 wealthy Chinese investors surveyed who have a net worth of 10 million RMB ($1.5 million) or more, 14 percent said they “lack confidence” in the economy in China, which is up from 8 percent in 2017. What’s more, Barron’s reported, that’s the highest level since Hurun began the survey fifteen years ago. Survey respondents who are “strongly confident” in China’s economy declined to 34 percent, down 12 percentage points, and setting a new record. Close to half of those who participated in the survey said they are “somewhat confident,” noted the report.

As a result of the concerns about the Chinese economy, which is being hit with declining demand and tariffs from the U.S., 36 percent of the rich Chinese investors said they would put investment dollars in “lower risk exposure” areas, which is up from 33 percent in 2017. Nearly 18 percent said they are taking a wait-and-see approach to investing in the current climate. Barron’s noted that moving to a more conservative stance means the wealthy investors are likely to increase investments going toward low-risk low return assets. That could include commercial real estate, fixed income, cash, and gold during the course of the next three years.

As for Chinese investors’ plans in terms of where they will reside, the survey found that around 53 percent of the individuals said they weren’t planning to emigrate to other countries. Of the survey respondents, 38 percent said they were mulling a move out of China. Close to 9 percent said they had citizenship outside of China or were in the process of getting it. Chinese wealthy eyed Europe as the top place to move to, with 30 percent of those surveyed citing that. Of the respondents, 28 percent said Australia would be their destination, tied with the U.S. Canada was third with 27 percent of the survey respondents’ support. Singapore ranked fourth as the place to move to with 11 percent of survey respondents, noted Barron's.

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