Covid-weary Chinese millionaires eye Singapore amid ‘chaos and unpredictability’ at home


By He HuifengJane Cai

Over the past seven years, Kristine Zhang’s social media signature has read “parting is for reunion” – a mantra she has clung to while enduring long spells away from her husband.

Since 2015, she has spent several months of each year in Singapore, where her son is studying, while her husband – a former executive at a foreign company – has been managing his car painting business in Guangdong.

Zhang’s husband had been reluctant to move the family to Singapore, or any other country for that matter, because he is bullish on the Chinese market. But recently he changed his mind.

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“We will be reunited soon, but unlike at first, Singapore is no longer a transit country for our son, but a permanent home,” said Zhang.

The couple are part of a new wave of Chinese immigration and investment in Singapore, which is becoming a magnet for professionals and the wealthy amid economic and social problems at home, according to interviews with consultants, investors and immigrants.

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“A sluggish domestic market, escalating lockdowns against Covid-19, depreciating properties and the [weak] yuan are all eating away at our wealth, as well as tighter tax scrutiny ahead. The point is, we don’t know how long this will last,” Zhang said.

The family plans to sell three properties in China within the next year, which are worth about 15 million yuan (US$2.1 million), and then relocate to Singapore, where they hope to become citizens and start a business.

Singapore’s appeal is multifaceted for mainland immigrants. Chinese are the largest ethnic group in the country and Mandarin is widely spoken. It is a relatively short flight home, safe, and a low tax jurisdiction.

The city state has also maintained close ties with Beijing, while avoiding choosing sides as tensions between China and the United States intensify.

The city is one of the top five destinations for high-net-worth individuals looking to emigrate, along with the United Arab Emirates, Australia, Israel and Switzerland, according to the Henley Global Citizens Report released in June.

Russia, China, India, Hong Kong and Ukraine have the highest net outflows of wealthy people, said Henley & Partners, an investment migration consultancy based in London.

In Asia, Singapore is of growing appeal to millionaires on the move, with net migration of 2,800 high-net-worth individuals expected this year – an 87 per cent increase on 2019, according to the report.

Wealthy Chinese see it as a safe haven to park financial assets, while offering them relative freedom, a welcoming environment and pro-business climate.

Nearly three quarters of Singapore’s 4 million citizens and permanent residents are ethnically Chinese, while some 13 .5 per cent have a Malay background and 9 per cent are of Indian heritage.

“We like Singapore’s multi-cultural society, and it’s also friendly to Chinese,” said Zhang.

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Some 67 per cent of Singaporeans view China favourably, while 90 per cent said their country had good ties with the country, according to a survey conducted by the Pew Research Centre released in June.

But growing interest in Singapore could spell bad news for the world’s No 2 economy. Wealth emigration is beginning to take a toll, with 10,000 wealthy Chinese packing up and leaving the mainland this year and 3,000 leaving Hong Kong, Henley & Partners estimated.

There has also been a sharp uptick in investment migration enquiries and applications.

By the end of the second quarter, more than 66 per cent of web enquiries from East Asia to Henley & Partners were from Chinese nationals, and Chinese enquiries increased by 134 per cent in the second quarter from the previous three months.

The most eye-catching Chinese immigrants to Singapore are wealthy entrepreneurs, who are setting up family offices in the city, said Joylin Su, an executive at an asset-management firm typically serving rich families.

More than 700 family offices were established in Singapore in 2021, and the figure was just 50 in 2018, according to the The Monetary Authority of Singapore (MAS).

A family office typically refers to a legal entity that carries out the administration and management of assets and investments of ultra-high-net-worth individuals or families for the purposes of capital preservation, succession planning, and managing investments.

MAS approved more than 100 applications to set up single-family offices in the first four months of the year. Assets under management in Singapore grew from S$4.7 trillion last year to S$5.4 trillion this year, according to MAS.

And more than 600 applications are awaiting approval, Su added, with each fund worth at least S$20 million yuan.

Over half of these are from rich Chinese families, including those who have stored their wealth in Hong Kong over the past few years, she said.

Singapore has maintained a good balance between East and West
Joylin Su

“It used to take about four months but now it takes up to 18 months to set up a family office in Singapore,” Su said, adding that applications have surged from previous years.

“Singapore has maintained a good balance between East and West, which makes it outstanding among the list of destinations for wealthy families to move from the mainland.

“Its clear tax system also makes the rich from across the world feel safe for wealth management.”

However, the surge in wealthy immigrants and talent may raise discussions domestically about taxation, including on property or inheritance, said Su, especially as the cost of living is soaring.

Savvy investors are rushing to exploit business opportunities serving the new arrivals.

A large number of professionals with experience working for fund management companies in China are moving to Singapore, Su said.

Private money transfer services in Singapore, like Zhongguo Remittance, are offering better exchange rates than banks’ official rates, showing strong demand for local currency among Chinese newcomers.

VIP clubs catering to Chinese are also mushrooming across Singapore, which is already home to scores of swanky wine bars and cocktail lounges charging top dollar.

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“A newly established club required each member to pay S$50,000 for expensive wine and cigars as a threshold, and 50 seats were snapped up on the opening day,” Su said.

“Locals in Singapore drink whiskey and wine, but the demand for Mao-tai in these clubs and fine restaurants has risen sharply to quench the nostalgia of these wealthy Chinese.”

Singapore’s total population, which includes non-residents, grew 3.4 per cent year on year to 5.64 million in 2022, according to official figures.

The number of Singaporean citizens rose 1.6 per cent to 3.55 million while the non-resident population, including workers and students, climbed 6.6 per cent to 1.56 million, according to the Department of Statistics.

Singapore’s status as an international tech hub – especially for the rapidly growing Southeast Asia market – has long made it appealing to workers in the fintech and IT industries.

Most Chinese students studying at Singapore universities are looking to stay, drawn by the stable political environment, competitive salaries and reasonable income tax, said Mei Lingchuan, an IT professional with experience in California who is now studying for an MBA in Singapore.

“Many of our Chinese alumni who graduated in previous years actually want to come back to work and live here,” he said.

Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said China’s stringent virus curbs explained why many were looking to leave China.

“The direct motivation of the relocations, as far as I know, is that people want to avoid the impact of Covid restrictions on their daily work and life,” Wu said.

Singapore’s other appeals include the fact that Mandarin is widely spoken, there is a quality education system and easier access for tech sector workers, said Wu.

The Singapore government favours a certain type of people – technology talents
Alfred Wu

“The Singapore government favours a certain type of people – technology talents. It has announced an extended tech visa to lure tech workers. I think people in the tech sector have a better chance to settle down in Singapore,” he said.

Starting next September, Singapore will offer a five-year visa for tech industry jobs, an extension from the two to three year permits currently available, according to the Ministry of Manpower.

Allen Wang, a partner at an overseas education consultancy in Shanghai, said enquiries to study in Singapore have been surging since spring after the two-month lockdown of Shanghai.

“When they decide to leave the chaos and unpredictability behind, Singapore is their top choice,” said Wang, who has been in the sector for more than a decade.

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“Growth dynamics ebb and flow. Singapore had its prime time before China’s rise to become the world’s factory in the 1990s. If China gears down its reforms and opening up, talent will flow to Singapore and contribute to its development.”

Despite Singapore’s increasing appeal, Chinese emigrants still have to contend with a host of issues once they arrive, said Gao Zhendong, a Beijing-based investor in Asean property and stocks.

“Inflation is already obvious there, and the US’ interest rate hikes are siphoning the liquidity of global investors, and Singapore and other Southeast Asian markets are no exception,” he said.

“In addition, if the relationship between China and the United States continues to deteriorate which leads to geopolitical tension in the region, it will be difficult for Singapore to sway one way or the other.”

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