This item has been corrected.
Talk about a vote of no confidence: 60% of wealthy Chinese are hoping to obtain or have obtained a foreign passport or permanent residence permit in a foreign country, according to a new report by the consultancy firm Bain that surveyed high net worth citizen mainlanders with at least 10 million yuan ($1.6 million) to invest.
As we’ve reported, China is intent on transforming from an export-driven economy into one powered by the spending of a healthy middle class. But Chinese who have already made their fortunes are surveying the country’s structural flaws—including financial repression, an increasingly dodgy-looking banking sector, and many other problems—and concluding that it’s essential to find an escape hatch abroad. “The more they look for risk diversification, the more they look elsewhere,” Jennifer Zeng, the lead author of the report, told the Wall Street Journal.
The most popular means of emigration for wealthy Chinese is what’s called “investment immigration”—buying a house or making a large investment in country in exchange for a visa. Last year, Chinese investors made up 80% of “EB-5” immigrants to the US who were awarded visas for investing $500,000 or more and creating at least 10 jobs in America. Australia has just granted its first “significant investor visa” to a Chinese toymaker. Another popular option is buying real estate worth €300,000 or more in Cyprus for a three-year European Union visa.
Bain also found that most wealthy Chinese listed “wealth preservation” as their main objective; two years ago, “wealth creation” was the most popular goal. If China’s millionaires are heading for the exits, it looks like interesting times ahead.
Correction (May 17, 10:09 a.m. ET): An earlier version of this article said that nearly 60% of wealthy Chinese nationals surveyed by Bain are thinking about or have completed emigration, rather than seeking a foreign passport or residence permit.