Array
When an investment looks like a bad risk, you take your money out of it. When your whole country’s economy looks like a bad risk you do the same thing. And that’s what wealthy Chinese citizens have been doing, stealthily moving their money abroad even though there is a potential risk of going to jail for violating laws against such moves.
Since international borders reopened post-pandemic, advisers to the rich report a surge in demand for overseas backup options. Crackdowns on ideologically out-of-favor industries, uncertainty over geopolitical tensions and Xi Jinping’s push for “common prosperity” have spooked the rich and even the middle class. In addition, the domestic economy looks increasingly dire. Exports are struggling, house prices are falling, and more than 1 in 5 young people are out of work. Many wealthy families feel it’s essential to have money outside the country, whether to diversify assets or to pave the way for potential future immigration…
Yet opportunities to move cash legitimately from China are severely limited, with individuals normally allowed to wire only $50,000 a year overseas. They also have a one-time opportunity to move their money when they emigrate. Plugging the gap is where the underground networks come into play. “These agencies have sprouted to meet soaring demand,” says Joel Gallo, an adjunct professor of finance at New York University Shanghai.
