They went to Singapore. Dubai United Arab Emirates; malta; London. tokyo; and New York—nowhere but their native China, where they felt their origins and personal safety were increasingly at the mercy of an authoritarian government.
In 2022, a year that has proven to be very challenging for China, many Chinese businessmen have moved abroad, temporarily or permanently. They were part of the wave of immigration that led to one of the top internet catchphrases of the year, “runxue,” which is understood to mean escape from China.
A dependent, albeit privileged, piece of the Chinese economic puzzle, these people are pulling back their fortunes and businesses when growth is at its lowest point in decades.
Many are still scarred by the past few years, during which China’s leadership hunted down the country’s largest private companies, denigrated its most high-profile entrepreneurs, destroyed entire industries through wanton regulation, and refused to budge on COVID-19 policies when many companies struggling. .
Although the government’s tone and policies have become more business-friendly in recent weeks, the entrepreneurial class – who have lost revenue, fortunes and most of all, confidence in the leadership – will not be so easily swayed.
A number of them said during discussions in Asia, Europe and the United States – at least, having lived in other countries devoid of fear, they are reluctant to put themselves and their business under the control of the Chinese Communist Party again. said Agene Wang, co-founder of a new crypto banking company, Flashwire, who moved from Beijing to Singapore in June after being caught up in Shanghai by COVID on a business trip. “There are many other places where you can do things.”
In their search for a place like this, many in China’s business elite focused on Singapore.
In a small office in that state’s central business district, JC Huo was constantly taking calls while serving tea to visitors from a bamboo tray.
Huo, the founder of Lutetia Consulting, which handles business registrations and visa applications in Singapore, said his list of Chinese clients has expanded rapidly over the past year. People in China’s education, gaming, cryptocurrency, and fintech industries — all targets of government crackdowns over the past few years — have sought his services.
During Shanghai’s lockdown, he said, his phone lines were “ringing fast”. He said the wealthy realized that no matter how much money they had, they still had to scramble for food and supplies under the strict restrictions of “zero COVID.”
Even over the past few 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 taking applications.
“Businessmen are still pessimistic,” he said. “As long as people are concerned about their assets, they will register their companies in Singapore and put their money here.”
JC Huo, whose company helps companies register in Singapore, in Singapore, October 4, 2022.
For these people, Singapore works because about 3 million of its citizens, or three-quarters, are of Chinese descent, and many of them speak Mandarin. They also like that he’s business-friendly, global-minded, and most of all, that he supports the rule of law.
People in the West may be wary of Singapore’s restrictions on individual freedom. But for most Chinese people, a government that respects the rule of law and does not arbitrarily change its policies is good enough.
“Singapore will not crack down on a company or industry outside its legal framework. Its policies have more continuity,” said Chen Young, founder of Pionex, the cryptocurrency exchange, who moved here from Beijing in 2021.
Chen and others I interviewed in Singapore said they had no plans to move to Hong Kong, despite that city’s eager attempts to attract people like them in recent months.
For decades, Hong Kong has played the role of a safe haven for mainland entrepreneurs due to its independence from China. That collapsed after Beijing passed a national security law in the province in 2020, leading to arrests of activists, confiscation of assets, detention of newspaper editors, rewriting of school curricula and what many see as compromising the independence of the judiciary.
Chen moved to Singapore because cryptocurrency trading, his industry, is banned in China. He has kept some developers in the country, but most of his operations are outside. He said being in Singapore helped him think more globally. And he was skeptical of Hong Kong’s ability to separate encryption policies from Beijing’s.
“When entrepreneurs choose to move to Singapore, it means they choose to leave China,” he said. He added that Hong Kong is not attractive to people who have made this choice.
Singapore has become a strong competitor to Hong Kong as a place for wealthy Chinese to accumulate their fortunes. Four of the 10 richest Singaporeans on the Forbes billionaires list are recent Chinese immigrants. So many people arrived last year that the founder of a startup said he gained weight from all the welcome dinners.
The rush of the Chinese business elite to Singapore has contributed to the high cost of living here. The median rent for a 1,000-square-foot residential apartment was about $3,500 per month at the end of September, up more than a fifth from the start of 2022, according to 99.co, the real estate portal. The cost of a license to own a car has increased by 40% in the past year.
Singapore also competes with Hong Kong as a place for mainland Chinese companies to register separate entities for their international operations. Some entrepreneurs want to build their global brands by identifying themselves as Singaporean companies.
For the outside world, “Hong Kong is part of China, while Singapore is not,” said Yu-Ning Liu, founder of Beijing-based Karma Games, which develops games that people play around the world.
Liu moves his Hong Kong operations to the city-state. He said he would start using his Singapore entity to release and market games for international markets.
Singapore has also emerged as a buffer zone as geopolitical tensions between China and the United States escalate. For some, a passport from Singapore is attractive because it has good relations with both countries.
Governments around the world are increasingly concerned about Beijing’s influence on Chinese companies. Many want to know whether these companies keep their citizens’ personal data safe and whether the Chinese entities’ investments have national security implications.
This screening has led some Chinese businessmen to seek foreign passports or at least permanent residence in other countries. A few said they feared their Chinese passports would put them at risk if China invaded Taiwan, triggering the kind of sanctions imposed on Russia and its companies since the war in Ukraine began.
Singapore entrepreneurs acknowledge that it has its limits. It’s small and expensive, and the talent pool is shallow. Many of them said it was an easy place to enjoy life but not ideal for starting, say, an ambitious tech company. Some of the wealthy and relatively young Chinese who have moved here have little to do but drink a lot of Moutai, the Chinese liquor.
Almost everyone would have preferred to stay in China if the circumstances were different. It’s a huge market with great infrastructure, the best supply chain in the world and an abundant supply of programmers willing to work overtime.
Most of them still maintain some business operations there. But they will not rush back, invest more and open new businesses just because the government turned them around.
“Businessmen don’t dare to take risks anymore,” Huo said. “They should think twice before doing anything – whether they are going to put their safety at risk.”