Bloomberg reported yesterday that many rich Hong Kongers are beginning to reduce their Hong Kong exposure by transferring their money out of Hong Kong (‘Hong Kong’s Rich Are Preparing for a Worst-Case Scenario‘, 14 Jun).
Private bankers say their clients accelerated contingency planning efforts after China announced last month it would impose controversial national security laws on Hong Kong.
“What we’re basically seeing is a bit like a slow-moving train wreck,” said Richard Harris, chief executive of Port Shelter Investment Management in Hong Kong. “People who haven’t moved their money out may be tempted to think: ‘Well, maybe I should be moving my money out.’ That process is likely to continue.”
Hong Kong’s wealthiest billionaires have publicly endorsed the legislation and expressed confidence in Hong Kong’s future but privately, many Hong Kong entrepreneurs and high-earning professionals are pessimistic.
One Hong Kong businessman, who would only gave his name as Cheng, told Bloomberg that he has already moved US$10 million to Singapore. He added that he plans to transfer more.
He has also secured his permanent resident status in Singapore this year and has been selling his Hong Kong properties. He has no concrete plans to emigrate yet, but is considering his options. He and his family have passports from the U.S., Canada, Australia and France.
Cheng, who was born in Hong Kong, said he worries about China’s tightening grip on the city and the prospect for more unrest.
Kerry Goh, CEO of Kamet Capital based in Singapore, said his clients have shifted from asking generic questions about moving out of Hong Kong to making detailed inquiries about everything from schools to visas and bank accounts. Goh’s company specialises in managing the assets of Asian-based high net worth families.
“What’s happened in Hong Kong has really sped up the timing of 2047,” Goh said, referring to the expiration date of China’s 50-year pledge to preserve Hong Kong’s autonomy. “As Hong Kong’s troubles shoot up, the benefits of Singapore have become more self-explanatory.”
Dennis, a 34-year-old executive, said his family and many of their friends have started moving cash out of Hong Kong. He’s looking to buy more properties in the U.K. “I could buy a much bigger flat in London, so why not?” he said. “I’m just trying to protect my money against any uncertainty.”
Govt grants Chinese fugitive PR to live in Singapore
For rich foreigners to obtain PR in Singapore, they would have to invest at least S$2.5 million in Singapore under the Global Investor Programme (GIP) run by EDB.
On its website, EDB said, “The Global Investor Programme (GIP) accords Singapore Permanent Resident status (PR) to eligible global investors who intend to drive their businesses and investment growth from Singapore. You will need to have a substantial business track record and successful entrepreneurial background to qualify.”
However, few years ago, an interesting case surfaced when China’s second most wanted fugitive involved in corruption was found living in Singapore with PR status.
Li Huabo was a Chinese government official from Poyang county in Jiangxi province. He embezzled 94 million yuan (US$14 million) of state’s fund before escaping to Singapore in 2011. Before fleeing, he funneled 29 million yuan (US$5.2 million) through Singapore banks.
He even managed to become a PR and lived in Singapore for awhile before he was found out by Chinese authorities that he was hiding here. He made it to the list of China’s ‘100 most wanted’ economic fugitives.
In May 2015, Li was repatriated back to China where he was sentenced to life imprisonment for corruption.
Singapore’s Immigration and Checkpoints Authority (ICA) later revoked his and his family members’ PR status.
It’s not known how EDB deemed that Li had a “substantial business track record and successful entrepreneurial background” in order to qualify for GIP.