A New Report Says Something Startling About China's Millionaires ...

The news: In 2013, spending on gift-giving went down 25% amongst wealthy Chinese, according to a new report from Hurum, a wealth research firm that focuses on China. With a broad economic decline and new corruption laws that have sowed fears among government officials over accepting expensive gifts, and among businesspeople in giving them, it’s not surprising that wealthy people are curbing their spending.

But there are also just less wealthy people in China: The report showed that 64% of China’s millionaires are emigrating, or planning to do so. And at this point, one-third of China's super rich have already left the country.

As of November, China's share of foreign-purchased residential real estate has jumped 50% since 2011. According to the report, the U.S. is the most desired destination, with Europe second, followed by Canada, Australia, and Singapore.

The background: China’s millionaires may be leaving to seek a cleaner environment and better educational options for their children. They also might be emigrating to protect their assets as China increasingly cracks down on corruption.

According to WealthInsight, the Chinese wealthy now have about $658 billion stashed in offshore assets. Boston Consulting Group puts the number lower, at around $450 billion, but says offshore investments are expected to double in the next three years. (It’s worth noting that reliable data on exactly how much money is moving out remains unclear as much of China's offshore wealth is moved illegally or in the shadow economy.)

The takeaway: With this millionaire migration and wealth flight, high-end restaurants and hotels as well as airline, luxury, and automobile companies in China have taken a major hit. According to global real-estate firm Knight Frank, dining revenue at five-star hotels is down 30% to 40% in the second half of 2013 from a year earlier. JC Mandarin, one of the first five-star hotels in Shanghai, last year was selling nearby office workers express $6 lunches in the same restaurant that offered a $30 buffet (the horror!). Bentley Motors last week said that its sales in China slowed in 2013 in part because of "the migration of high net worth individuals from China." Swiss watch imports into China fell 15% in the first 11 months of 2013. On the popular Beijing-Shanghai airline route, it is possible to get a business-class seat for $200, 60% less than previously and no more than a full-price economy-class ticket.

Bargain-hunters: book your flight to Beijing.

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Emily Barasch

Emily is a writer living in New York. Her writing has appeared on theatlantic.com and dowser.org. She graduated from Yale where she was Editor-in-Chief of the Yale Herald.

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