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- Entrepreneurs wary of China’s crackdowns on private businesses are leaving the country. Many are settling in Singapore, which has seen a boom in family offices and rising home prices. (The New York Times)
- NH: In our recent piece about China’s economic prospects (see “What’s Hobbling the Rise of China?”), I noted that Xi Jinping’s crackdown on private businesses is contributing to the country’s lower productivity growth. As highlighted here, it’s leading to a mass exodus of China’s richest entrepreneurs, which may be one of the drivers.
- For decades, Hong Kong was the destination of choice for Chinese entrepreneurs looking to distance themselves from the mainland. But since the 2019 crackdowns in Hong Kong, Singapore has emerged as the new safe haven. Four of the 10 wealthiest Singaporeans on Forbes’ billionaires list are recent immigrants from China. The number of family offices in the city-state jumped fivefold between 2017 and 2019. Between 2020 and 2021 alone, it almost doubled from 400 to 700. Given these individuals' extreme wealth, I would bet that the lion's share of these offices are single-family.
- Singapore has long been an attractive destination for the wealthy because of its low taxes. But Chinese entrepreneurs preferred to stay in China because of its more robust business environment and much bigger talent pool. Two miserable years under “zero Covid,” combined with the regulatory crackdowns, has pushed them over the edge. China's recent reopening of its borders has made emigrating much easier.
- Many left the country after Xi secured his third term in October. The investment migration consulting firm Henley & Partners estimated that in 2022, around 10K ultra-rich Chinese residents left and took $48B in wealth with them. Only Russia saw a bigger outflow of people and wealth.
- The incoming flood of tycoons is pushing up prices in Singapore. Home prices rose +8% in the first nine months of 2022. The price of an expat membership at the exclusive Sentosa Golf Club more than doubled. Sales of luxury cars soared, with the number of Rolls-Royces registered in Singapore up +90% in 2022 compared to 2019.
- Historically, China has been indifferent to those who move abroad--as long as they don’t criticize the CCP. But now that “zero Covid” is over and the borders have reopened, Xi cannot take for granted that Chinese entrepreneurs will stay in China. He has rolled back restrictions on tech companies and vowed to support private businesses in a speech last month--moves that reflect his new focus on economic growth.
- And Singapore itself must be mindful of the potential political repercussions of becoming a rival destination for China's business elite. For now, it serves as a safe "buffer zone" between China and the United States. But if U.S.-China tensions come to a head, it may be forced to choose a side.
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ABOUT NEIL HOWE
Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.
A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.
Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."
Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.
Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.
Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.