What does China’s millionaire exodus mean for luxury?

What happened: The Henley Private Wealth Migration Report 2024 highlights significant shifts in millionaire migration. China takes the top spot for outflow of millionaires (defined by those with liquid investable wealth of $1 million or more), with a projected net exit of 15,200 high-net-worth individuals (HNWIs) in 2024, up from 13,800 in 2023. Next is the UK with an expected loss of 9,500 millionaires in 2024, while India comes in third place, with 4,300 expected to leave. But where are they all heading to? The United Arab Emirates (UAE) emerges as the top destination for migrating millionaires – a record net 6,700 HNWIs are expected to arrive this year, attracted by the UAE's zero income tax policy and an attractive expatriate lifestyle. The US and Singapore follow behind, with net inflows of 3,800 and 3,500 millionaires expected, respectively. These patterns underscore a realignment in global wealth. Countries with golden visa programs that offer fast-track immigration for wealthy investors have found popularity over the years with Chinese HNWIs. Robust legal systems and high-end English-language education in the UK, US and Canada have also traditionally offered long-term appeal. The Jing Take: This year is said to be a watershed moment for millionaire migration, with the global exodus seeing China, once again, leading the list of countries with an outflow. To prevent capital flight, Chinese authorities have for years limited the amount that a citizen can take out of the country to US$50,000 in foreign currency each year — a paltry sum to start a good life abroad. But still the movement has grown. “This great millionaire migration is a canary in the coal mine, signaling a profound shift in the global landscape and tectonic plates of wealth and power,” says Henley’s Group Head of Private Clients Dominic Volek. “An unprecedented 128,000 millionaires are expected to relocate worldwide this year, eclipsing the previous record of 120,000 set in 2023. As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty, and social upheaval, millionaires are voting with their feet in record numbers.” In China, the government's "common prosperity" mandate has some UHNWI worried, fearing more clampdowns on opulent lifestyles and extreme wealth. The country’s recent crackdown on “money worship” has led to the disappearance of top ultra luxury influencers and KOLs from social platforms, and the removal of related content on Douyin and Weibo has also been reported. Luxury brands should continue to serve those in the nation, while also following the wealthy Chinese diaspora to capture a growing, high-spending, market segment. Connecting with them on emotional, cultural, and community touch points in their cities is essential, as revealed by the Jing Daily report on the influence of overseas Chinese. Exposure to different cultures and information sources fosters openness, knowledge and eventually connoisseurship, making them influential tastemakers in the luxury market. As the global luxury market faces a slowdown, economic headwinds have disproportionately impacted entry-level consumers, while industry analysts have noted the resilience of the super wealthy, who continue to drive spending. Thus, there will most likely be a two-speed recovery within luxury. While high-end businesses focus on personalization and exclusivity to maintain growth, they must also rethink strategies to weather the current storm buffeting the middle classes. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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What does China’s millionaire exodus mean for luxury?