Beijing prefers wealthy Chinese to spend their money back home rather than in Singapore

SINGAPORE: An April 21 article in The Sydney Morning Herald (SMH) said that while wealthy Chinese have been coming to Singapore and spending on luxuries, cars, and property, “China could do with some of its big spenders coming back.”

A move to Singapore is not a new phenomenon for China’s richest due to the country’s reputation as a tax haven, but a fresh wave arrived last year due to President Xi Jinping’s crackdowns and the Covid-19 shutdowns.

In February, the national British daily broadsheet newspaper The Telegraph said Singapore had become a “playground for Chinese ultra-rich.”

However, a Bloomberg report from earlier this month said that despite the expectation from wealth managers and financial institutions of an influx of investments from the rich Chinese, this has not happened.

SMH reported that Singapore pulled in $25 billion in fixed asset investments, mostly in property. It noted that the spending by the wealthy Chinese has helped drive inflation up to a 14-year high of 6.4 per cent, which has reflected in a spike in rental prices.

The article also quoted Chung Ting Fai, a family office lawyer, saying, “I think the fear among locals is that Singapore becomes a playground for the rich.”

“Beijing wishes it was being spent at home,” the piece added, noting that the hoped-for post-COVID consumer boom has yet to materialize, with retail spending staying low as consumers remain gun-shy.

“It grew by only 5.8 per cent in the first three months of this year, significantly lower than the 8.3 per cent it recorded in the pre-pandemic world of early 2019,” SMH noted.

The piece quoted National Bureau of Statistics spokesman Fu Linghui as saying, “Inadequate domestic demand remains prominent, and the foundation for economic recovery is not solid yet.”

It also quoted Mr Chung, who said that the optimism many felt after pandemic restrictions were lifted has dissipated.

“A lot of businesses, especially in manufacturing and finance, have lots of problems because rural workers are not coming back, and factories have shifted to Vietnam. And other people think the restrictions put in during COVID will stay.” /TISG

New report says ultrarich Chinese who’ve moved to S’pore haven’t brought investments in