They went to Singapore; Dubai, United Arab Emirates; Malta; London; Tokyo; and New York – anywhere but their home country of China, where they felt their property and personal safety were increasingly at the mercy of the authoritarian government.
In 2022, a year that has proven to be extremely difficult for China, many Chinese businessmen have moved abroad, either temporarily or permanently. They were part of a wave of emigration that led to one of the main online slogans of the year, “runxue”, understood to mean fleeing China.
A substantial, albeit privileged, piece of China’s economic puzzle, these people are withdrawing their wealth and businesses as growth is at its lowest level in decades.
Many of them are still scarred by the past few years, during which China’s rulers attacked the country’s biggest private companies, vilified its most famous entrepreneurs, decimated entire industries with arbitrary regulation and refused to budge on the COVID-19 policies when many businesses were struggling. .
Although the government’s tone and policies have become more business-friendly in recent weeks, the entrepreneurial class – which has lost incomes, fortunes and, above all, trust in leaders – will not be easily swayed.
Now that they have lived fearlessly in other countries, they are reluctant to hand themselves and their businesses over to the Chinese Communist Party, a number of them said in discussions in Asia, Europe and in the United States – at least not until they are assured that the state will have to follow the same laws as the citizens. -founder of a crypto-banking startup, Flashwire, who moved from Beijing to Singapore in June after being trapped in Shanghai’s COVID lockdown while on a business trip. “There are lots of other places where you can do things.”
While searching for such a place, many members of China’s business elite focused on Singapore.
In a small office in the central business district of this city-state, JC Huo constantly took calls as he served visitors tea on a bamboo tray.
Huo, founder of Lotusia, a consultancy that handles business registrations and visa applications in Singapore, said his list of Chinese clients had grown rapidly over the past year. People working in China’s education, gaming, cryptocurrency and fintech sectors — all targets of government crackdowns in recent years — had sought his services.
During Shanghai’s lockdown, its phone lines were “ringing non-stop”, he said. The wealthy, 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 in recent weeks, after the Chinese government rolled out the red carpet for the private sector and Hong Kong pledged to attract crypto talent from mainland China, Huo has been busy responding to requests.
“Entrepreneurs are always pessimistic,” he said. “As long as people are worried about their assets, they will register their companies in Singapore and put their money here.”
NYT News ServiceJC Huo, whose company helps businesses register in Singapore, in Singapore on October 4, 2022.
For these people, Singapore works because about 3 million of its citizens, or three-quarters, are of Chinese descent and many speak Mandarin. They also like that it’s business-friendly, globally minded, and most importantly, respects the rule of law.
Westerners may bristle at Singapore’s limitations on individual liberty. But for most Chinese, a government that upholds the rule of law and does not arbitrarily change its policies is enough.
“Singapore will not crack down on any business or industry outside of its legal framework,” said Chen Yong, founder of Pionex, a cryptocurrency exchange, which moved from Beijing in 2021. “Its policies have more continuity .”
Chen and others I met in Singapore said they had no plans to move to Hong Kong, despite that city’s enthusiastic attempts to woo people like them in recent months.
For decades, Hong Kong has acted as a haven for mainland entrepreneurs due to its autonomy from China. This fell apart after Beijing introduced a national security law in the territory in 2020, ushering in the arrest of activists, the seizure of assets, the detention of editors, the rewriting of school curricula and so on. which many see as an attack on judicial independence.
Chen moved to Singapore because crypto trading, his industry, is banned in China. It has kept a few developers in the country, but most of its operations are outside. He said being in Singapore helped him think more globally. And he was skeptical of Hong Kong’s ability to separate its crypto policies from those of Beijing.
“When entrepreneurs 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, he added.
Singapore has emerged as a powerful rival to Hong Kong as a place where China’s super-rich can park their fortunes. Four of the 10 richest Singaporeans on Forbes’ billionaires list are recent Chinese immigrants. So many people arrived last year that one startup founder said he gained weight from all the welcome dinners.
The influx of elite Chinese businessmen to Singapore has contributed to a rise in the cost of living here. The average rent for a 1,000-square-foot condo was about $3,500 a month at the end of September, up more than a fifth from the start of 2022, according to 99.co, a real estate portal. The cost of a license to own a vehicle has increased by almost 40% over the past year.
Singapore also competes with Hong Kong as a place where mainland Chinese companies can register separate entities for their international operations. Some entrepreneurs want to grow their global brands by identifying themselves as Singaporean companies.
To the outside world, “Hong Kong is part of China, unlike Singapore,” said Yu-Ning Liu, founder of Karma Games in Beijing, which develops games played by people around the world.
Liu moves his operations from Hong Kong to the city-state. He said he would start using his Singapore entity to publish 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 Singapore passport is attractive because it has good relations with both countries.
Governments around the world are increasingly wary of Beijing’s influence over Chinese companies. Many want to know whether these companies protect the personal data of their citizens and whether investments by Chinese entities have national security implications.
Such scrutiny has led some Chinese entrepreneurs to apply for foreign passports or at least permanent resident status in other countries. A few said they feared their Chinese passports would leave them vulnerable if China invaded Taiwan, prompting the kind of sanctions imposed on Russia and its companies since the start of the war in Ukraine.
Singapore entrepreneurs admit it has its limits. 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, relatively young Chinese who have settled here don’t have much to do, but drink a lot of Moutai, the Chinese liquor.
Almost all of them would have preferred to stay in China if the circumstances had been different. It’s a massive market with excellent infrastructure, the best supply chain in the world, and a plentiful supply of programmers willing to work overtime.
Most of them still maintain commercial activities there. But they’re not going to rush in, 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 anything – if they will put their safety at risk.”