03/31/2022, 13.55
RED LANTERNS
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Xi's 'Common Prosperity' scares: Chinese billionaires flee to Singapore

by Li Qiang

Driven by the Chinese leader's "redistributive" policies, such as the crackdown on hi-tech, real estate and private education giants. In China there are 626 billionaires: potentially a counter-power in the eyes of the regime. In China's rural areas, per capita income is less than half that of the cities.

 

Beijing (AsiaNews) - More and more Chinese billionaires are moving their capital to Singapore, a growing trend since last year, when Xi Jinping launched his campaign for "common prosperity": an attempt to force large (private) industrial groups to share their growing wealth with the less privileged strata of the population.

The figure emerges from a Cnbc survey, according to which in the city-state of Southeast Asia, "family offices" opened by wealthy Chinese are multiplying. These are financial vehicles that manage the assets of one or more families: in the case of Singapore a capital of 5 million dollars (4.5 million euros) is required.

After pro-democracy protests in 2019 rocked Hong Kong's economy, Chinese oligarchs sought an alternative to safeguard their wealth. Thanks to the fact that a large portion of the population speaks Mandarin, and the low taxation regime, Singapore is an ideal haven for the Asian giant's tycoons.

Forbes reports 626 billionaires in China, a number lower only than those in the USA (724). While Chinese businessmen say they are convinced that their country offers great opportunities to get rich, they doubt that it is a safe place to keep them.

Xi has taken a more dirigiste turn in the Chinese economy. The Common Prosperity Policy came on the heels of a crackdown on hi-tech monopolists, big real estate developers and private schools (especially those run by foreigners).

For many critics, including members of the pro-market wing of the Chinese Communist Party, Xi's Maoist turn has little to do with wealth redistribution. It is actually a way to depower the oligarchs whose economic might could threaten his power.

Then there is the problem of how to translate the directives coming from Xi into practice. As reported by the South China Morning Post, many local administrators are not sure how to intervene to reduce the economic gap between rich and poor in their territories. Analysts point out that development needs in China change from province to province, and a one-size-fits-all approach may not work.

The biggest gap, and thus the biggest challenge for Xi's redistributive plan, remains that between urban and rural residents. Per capita income in China is about 35,000 yuan (4,960 euros); in the cities, however, it reaches 47,400 yuan (6,720 euros), more than double that in the countryside (19,000 yuan, about 2,695 euros). 

Regardless of the internal dynamics in China, one factor that may halt the flight of Chinese capital to Singapore is the outcome of the conflict in Ukraine. The U.S. and its allies have threatened consequences if Beijing tries to help Russia resist sanctions imposed for its invasion of Ukrainian territory. Singapore is among the few Asian countries that have joined the sanctions regime against Moscow: it could therefore potentially take indirect punitive measures against China, including freezing the bank accounts of Chinese citizens.

"RED LANTERNS" IS THE ASIANEWS NEWSLETTER DEDICATED TO CHINA

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