If the title of the article has shocked you then let me tell you there is nothing to be so shocking about this news. China, home to the largest population, is now carefully observing as its rich citizens are leaving. Want to know why is this happening? Let's dig into it.

image source: nytimes.com

Zero-Covid Policy Of China

China's zero-tolerance policy toward covid has destroyed many businesses. Frequent lockdowns have forced many businesses to shut down ( source: click here). They do not see a bright future in their county and now are looking for other options outside China. Some businesses have already started shifting their investments outside China (source: click here). 

Data suggest that around 10,000 high-net-worth citizens, worth $48 billion want to leave their country (source: click here). This is the second largest predicted wealth outflow for any country after Russia. The rich are now making more inquiries about leaving. 

Current Situation

China's rich main inquiry is about how to move money out of their country. People living in China are only allowed to convert a fixed amount into foreign currency every year. In the past, the rich had found ways around this particular rule. They used cryptocurrency or made a private arrangement with an overseas firm to bypass it. But the chines government cracked down on crypto-currency and closed that path and swipe agreements have also become difficult. 

China's Government Response 

The biggest concern for China's rich citizens who wants to leave china is will the Xi Jinping government let them leave this easily. Until now policy makers of China haven't tightened relocation curves but moving out of China may become difficult in the near future. 

Passport processing time has increased. The documentation requirement has become stricter and shifting large sums of money has become harder. This can lead to a struggle between the rich and the CCP.     

How Did Things Come to this?

Under Hu Jintao, China was in a better position. Though we can argue whether it's true or not but I personally believe that it's true if we compare the situation in China now. Banks are sinking into insolvency, investors losing trust, more restrictions and internet censorship, no more ease of doing business, crack down on tech giants like Alibaba (source: click here), and more visible corruption at the top level of government ( Peng Shuai case).