Amid Economic Uncertainty, China’s Wealthy Looks Abroad

A weakened Chinese economy has certainly sent a ripple effect across the global economy, but it may also be causing some of China’s largest investors to pull their money out of the country to invest overseas.

A Financial Times article dug into the issue this week, examining how the stock market slump has forced investors to look outside China. In fact, a survey conducted by FT Confidential showed that more than 60 percent of the wealthy Chinese citizens who were surveyed in July said they planned on bulking up their holdings abroad in the coming two years. That same survey showed that nearly half of those in the high net worth category had earmarked at least 30 percent of their assets for international investments (the U.S. was the top choice for 42 percent, followed by Hong Kong, Australia, Canada and the U.K.).

Because China’s upper class is made up largely of self-made business owners (Alibaba’s Jack Ma serves as its top example), they are heavily dependent on the state of China’s economy. When China was booming, those business owners were able to bank on the investments that sent money funneling into China. But now, those investors have to look outside their homeland to divest some of their funds.

“China’s policy changes so quickly,” a businessman in Shenzhen told Financial Times. “I am worried about the safety of my wealth.”

Other businessmen shared the same sentiment. The U.S., of course, has been viewed as a top investment spot with its growing economy and quality education options — which has drawn more Chinese students into the country to get a westernized education. In fact, in the past decade alone, the number of Chinese students who’ve come to the U.S. has quadrupled.

China’s wealthy are also increasingly investing in strategically placed homes in particular districts/regions of the country to secure a good school for their children.

“The focus of China’s high net worth families has shifted from making as much money as you can to protecting your wealth,” Shang Dai, chief executive of Kuafu Properties, a New York-based developer, told FT.

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