Quantum Wealth Summary
- Xi Jinping has secured an unprecedented third term as China’s president. This makes him the most powerful leader since Mao Zedong.
- Faced with a troubled economy, Chinese millionaires have started their exodus. They are seeking safety and freedom abroad. In 2022 alone, China is projected to lose over 10,000 high-net-worth individuals.
- As the Chinese dream crumbles, one contrarian trading instrument has surged over 36% this past year. Could rebellious investors profit from China’s reversal of fortune?
- We also explore our Weekly Top 5 Quantum Trends. These are critical and urgent global prospects that you can’t afford to miss.
Tempus fugit.
That’s Latin for ‘time flies’.
Indeed, a lot can happen in 20 years.
Think back to what took place in 2001. That was when China was first admitted to the WTO. Ironically enough, this happened through intense American lobbying.
Back then, the policymakers didn’t think very much about consequences. Their mission was simply to open China up as quickly as possible. Turn it into the world’s factory. And by doing so, they believed that all of China’s thorny problems would eventually be resolved by a mixture of free trade and diplomacy.
What misguided faith.
Of course, it hasn’t turned out that way.
Now, in 2022, President Xi Jinping is raising the Bamboo Curtain once more. He has just cemented his hold on power, winning an unprecedented third term. And this has had a chilling effect on the freedom of discourse within China.
Source: Reuters
Alibaba founder Jack Ma — perhaps the most charismatic Chinese entrepreneur of his generation — has felt the sting of President Xi’s crackdown. Ma has pretty much disappeared from public view. Silenced. Suppressed. The same goes for other billionaires like Guo Guangchang, Zhou Chengjian, and Ren Zhiqiang.
What were their sins?
Well, quite simply, they’re all mavericks. Resourceful men determined to chart their own destinies. And, inevitably, this has set them on a collision course with President Xi’s vision of a ‘rejuvenated China’.
These billionaires did not fit in. So they needed to be punished. To be made an example of.
Undeniably, this has sent shockwaves rippling throughout Chinese society. As someone who’s ethnically Chinese myself, I can tell you for a fact: the Chinese are world-class gossipers behind closed doors. They always know which way the wind is blowing, even if they will never say it out loud.
So, quietly, decisively, Chinese people who have built up sufficient wealth are voting with their feet. Moving their families and their assets abroad. Looking for greener pastures.
This year alone, over 10,000 high-net-worth individuals are projected to leave China.
There are two reasons for this stunning statistic:
- China’s forward momentum has stalled. Gone are the glory days where the country’s growth surged along in the double digits. Now, as China grapples with the lower single digits, some economists have revised their forecasts. They believe that China may not overtake America as the world’s largest economy until 2060 at the earliest. And even then, perhaps not at all.
- Rising ultranationalism means that China is starting to look inward rather than outward. The freedom and openness that entrepreneurs once enjoyed under previous leaders like Hu Jintao and Jiang Zemin has come to an end. Xi Jinping’s administration is much more paranoid and myopic. You either work loyally for him — or he places you in cold storage. No ifs. No buts.
Source: Statista
So, a Chinese exodus is on the cards. But what does it look like? Here’s a taste from CNBC:
Over the last 12 months, inquiries about setting up a family office in Singapore have doubled at Jenga, a five-year-old accounting and corporate services firm, according to its founder Iris Xu. She said the majority of inquiries come from people in China or emigrants from the country.
About 50 of her clients have opened family offices in Singapore — each with at least $10 million in assets, Xu said.
Now, here’s a more intimate portrait, which comes from Fortune:
Shanghai-based billionaire Yimeng Huang—the CEO and chairman of gaming company XD—announced in a company memo that he and his family would relocate from China. The note leaked onto the internet and went viral on Chinese social media, sparking netizen discussions on the growing number of prominent businesspeople leaving China.
Indeed, the nation’s wealthiest are feeling increasingly besieged. Increasingly restless. And if this situation continues on its current trajectory, it can only mean one thing: the Chinese dream is over.
And why not?
China’s problems are legion.
An ageing society. Relentless Covid lockdowns. A property market pushed to the brink. And don’t forget: a more hostile and assertive West gearing up for Cold War 2.0.
Can China beat the odds this time?
Well, there’s no crystal ball here. But if you are feeling sceptical about China’s future prospects, you might be intrigued to know that one contrarian trading instrument is up by over 36% this past year.
Why?
Well, lately, it’s been easier to profit from negativity rather than positivity.
So, here’s the $17 trillion question: is it time to bet against China?
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