Desperate Chinese middle class take big risks to move money, and themselves, overseas
Growing worries are pushing more wealthy mainlanders to seek property and long-stay visas overseas – but for some, it has turned into a nightmare
China’s middle class is something of a mythical entity, with wide-ranging estimates of its size and economic power. Optimists believe a large and growing middle class has the ability to lift China and even the world to a more prosperous level, while pessimists foresee an increasingly burdened group that could cause the economy to stagnate and even lead to political chaos. In this, the third of a four-part series, The South China Morning Post continues to examine the myth to reveal the economic and political implications of its evolution.
Chinese citizens Xin Piao, Raymond Zhang and Wendy Wang were strangers until August, when they joined a group on social media platform WeChat dedicated to “getting refunds on Australian housing”.
Like the rest of the group, which has more than 300 members, they were worried about the slowing Chinese economy and had tried to safeguard their wealth by buying properties in Australia.
But what seemed like a smart idea at the time has turned into a nightmare – their money has vanished, allegedly misappropriated by an investment adviser well known for offering property and brokering mortgages in Australia to wealthy Chinese investors.
In China, the 17 luxury offices of that property agent, Ausin China, were suddenly shut down in August. Left behind were a trail of missing deposits and failed settlements worth more than A$70 million (US$49.6 million) from some 200 Chinese buyers of yet-to-be-built flats and houses at 15 Australian property projects, the South China Morning Post has learned from some of the investors.
Their painful experience is the latest cautionary tale highlighting the growing risks as demand from wealthy and upper-middle-class mainlanders to protect themselves and their assets abroad has surged. A growing number of Chinese have rushed to obtain long-stay visas or property in friendly foreign countries as an insurance policy against a worsening of domestic conditions. Spurred by a lack of investment options at home and rattled by the sweeping anti-corruption campaign of President Xi Jinping, those with significant assets are looking for ways to move their money overseas, by legal means or otherwise.