A worker transports luggage on the tarmac of Wuhan Tianhe International Airport, in Wuhan, China, on July 14.STRINGER/Reuters
When Canadian-Chinese billionaire Xiao Jianhua was kidnapped from a hotel in Hong Kong in 2017, halfway across the world in Poland, David Lesperance’s phone started ringing.
Originally from Ontario, Mr. Lesperance specializes in helping wealthy individuals secure alternative passports and move their businesses and money overseas, out of the reach of potentially hostile governments. Or, as he puts it, “protecting your ass and your assets.”
For many rich Chinese, Mr. Xiao, who was worth an estimated US$4.5-billion when he was snatched, has become the ultimate cautionary tale.
He had moved much of his wealth out of the country, held both Canadian and Antiguan passports and avoided mainland China, operating instead from nominally autonomous Hong Kong. But in the end, none of this was enough to protect him from Beijing.
When the tycoon finally went on trial in Shanghai this month, Mr. Lesperance said he saw another spike in enquiries from wealthy Chinese wanting to avoid his fate, worried their own escape plans were equally not fit for purpose.
Since Chinese President Xi Jinping came to power in 2012, many elite figures who once thought themselves untouchable have been caught up in his sweeping anti-corruption campaign or by more recent clampdowns targeting the technology and financial sectors.
“When they went after Jack Ma, you had a lot of people saying, ‘Well, I’m not as big as Jack Ma, so I better plan accordingly,’” Mr. Lesperance said, referring to the founder of e-commerce giant Alibaba, who largely disappeared from public view after a public spat with Beijing in late 2020.
Jack Ma, CEO of Chinese e-commerce giant Alibaba, speaks during his visit at the Vivatech startups and innovation fair, in Paris, on May 16, 2019.PHILIPPE LOPEZ/AFP/Getty Images
China’s tough “zero-COVID” policy, which has led to draconian lockdowns in Shanghai and dozens of other cities, has also made many Chinese – both wealthy and not – consider moving elsewhere.
Last month, Huang Yimeng, the billionaire co-founder of Shanghai-based gaming firm XD Inc., said he was preparing to leave China, citing family reasons. The announcement was widely discussed online, with many pointing to Mr. Huang’s personal experience of the Shanghai lockdown as well as a bruising government crackdown on the gaming industry.
According to investment migration consultancy Henley & Partners, some 13,000 high-net-worth individuals will leave China and Hong Kong this year, almost as many as the 15,000 predicted to depart Russia. They will take with them billions of dollars in assets, with Portugal, Singapore and a number of Caribbean countries among the top destinations, thanks to generous residence or citizenship programs.
Andrew Amoils, head of research at New World Wealth, a South African-based consultancy, said that “affluent individuals are extremely mobile, and their movements can provide an early warning signal into future country trends.”
“Wealth emigration is beginning to hurt in China,” he wrote in a recent report. “General wealth growth in the country has been slowing over the past few years. As such, recent outflows of [high-net-worth individuals] may be more damaging than in the past.”
This could be why Beijing is throwing up barriers to those trying to leave.
China has some of the tightest foreign exchange controls in the world, with citizens only allowed to convert US$50,000 a year, and strict reporting requirements on most overseas transactions. While people with foreign residency or citizenship can move money out of the country more easily, doing so in the current climate may put them on the wrong side of the government.
“You have to plan to try and get as much out as possible, as you’re only going to have one chance to do it,” said Mr. Lesperance. And you may be leaving behind more than money, he added, pointing to how China has used exit bans to punish the family members of those it deems to have fled overseas.
In 2018, American siblings Victor and Cynthia Liu found themselves trapped in China after travelling there to see an ailing grandfather. Their father, former Bank of Communications official Liu Changming, had left the country in 2007 facing fraud charges, but his children maintained they had no contact with Mr. Liu and no way to get him to return to China.
They were finally released last year, apparently as part of the deal that saw U.S. prosecutors resolve a case against Huawei executive Meng Wanzhou, which also prompted the release of detained Canadians Michael Kovrig and Michael Spavor.
Even just physically leaving the country has become more difficult.
Earlier this year, Beijing announced strict curbs on all “non-essential” overseas travel. While ostensibly in the name of fighting COVID-19, the restrictions coincided with a spike in outbound travel and widespread discussion online of “run-ology,” a term used for both the desire to leave and practical tips and strategies for doing so.
In 2021, China issued just 630,000 passports, about 2 per cent of the number handed out in 2019, according to the National Immigration Administration. Applicants now have to show an urgent need to travel, such as a job offer or place at a foreign university.
There have also been reports of immigration staff clipping the corners of Chinese travellers’ passports when they return home, preventing them from leaving again, though the NIA has denied that such a policy is in place.
Eva Li, a 27-year-old Shanghai resident, told The Globe and Mail that she tried to renew her passport in June but was rejected.
“I told them my passport was expiring and I wanted to get a new one,” she said. “I had a 10-year visa [for the U.S.] on it, and they said it’s impossible to renew a passport with a tourism visa on it, as now the policy is that people should avoid going abroad unnecessarily.”
Ms. Li said she is worried that leaving the country “might be nothing but a dream in the future.”
“I do want to travel more,” she said. “To be honest, I’d love to leave tomorrow, but how?”
With files from Alexandra Li and Reuters
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James Griffiths