China lost 36% of its billionaires to years of economic troubles and crackdowns

• According to Hurun's 2024 rich list, China lost 432 billionaires since the high of 1,185 in 2021.
• It's a reflection of China's struggling economy and a government crackdown on the superrich.
• Some wealthy citizens are looking for covert ways to move their wealth out of China.

The number of China's billionaires has dropped by a third since 2021, according to an annual rich list, as difficulties for the country's economy and government crackdowns took their toll.

Hurun, a private research group that has tracked Chinese billionaires since 1999, said the total peaked in 2021 with 1,185 billionaires, a figure which fell to 753, a decline of 432, or 36% of the total.

It comes as some of China's superrich choose to lie low or leave the country, finding covert ways to take their money with them.

An old guard departs

Older tycoons — often real estate — are giving way to a new cohort propelled by tech, energy, and e-commerce.

Topping the Hurun list this year was Zhang Yiming, the founder of TikTok owner Bytedance, with a fortune of $49.3 billion.

ByteDance's global revenue grew 30% last year to $110 billion, with users in the US of its TikTok app closing in on 200 million. ByteDance operates a separate app, Douyin, for Chinese users.

Yiming replaced Zhong Shanshan, who fell to second place with a fortune of $47.9 billion. His worth declined 24%, the biggest drop of the year at $15.5 billion.

"The stories of the individuals on the Hurun China Rich List tell the story of the Chinese economy," said Rupert Hoogewerf, Hurun's Chairman and Chief Researcher.

"The likes of Robin Zeng of lithium battery maker CATL wasn't even on the list 10 years ago, neither was Li Zhenguo of solar panel maker Longi."

"Most new faces this year came from Taiwan, which has enjoyed a relatively strong stock market, underpinned by its semiconductor industry," he said.

Hoogewerf told Business Insider that the list only included people who were "born and bred, or started out and live in Greater China" up to a minimum age of 18, regardless of their current citizenship.

A reflection of China's economy

China's economy has been grappling with a prolonged housing crisis, high unemployment, high local government debt, and weak consumer demand. Those headwinds hit its superrich, too.

Earlier this month, China released third-quarter growth data that was its slowest in six quarters. The government is promising stimulus measures to boost economic growth and has plans to approve more than $1.4 trillion in extra debt in the next few years, according to Reuters.

"With property prices falling and the economy generally tightening, it's not a big surprise the numbers of super-wealthy are falling in China," Kerry Brown, Professor of Chinese Politics at King's College London told BI.

"And people now don't want to draw attention to themselves while the government is laying stress on equity and greater balance."

An exodus of the superwealthy

Chinese billionaires are also feeling Xi Jinping's push for a "common prosperity," which was widely viewed as a call for billionaires to share their wealth.

That led, among other things, to regulatory crackdowns on tech platform companies and campaigns against China's rich entrepreneurs.

Some of China's superrich have also experienced political backlash for making statements perceived as against Xi, including Jack Ma, the founder of Alibaba and Ant Group and once the invincible poster boy of Chinese tech.

He disappeared from public view in 2020 after facing action from Chinese regulators that resulted in an antitrust investigation, a suspended IPO, and the loss of $12 billion in personal fortune within a few months.

"Other superrich individuals may have taken such high-profile cases as good reason to preempt possible trouble by moving out of China," Brown wrote in an article for The Conversation.

While this may not be reflected in the Hurun rich list, China is on track to see a record exodus of 15,200 high-net-worth individuals in 2024, according to a report by investment migration firm Henley & Partners.

High-net-worth individuals were classed as those with liquid investable wealth of $1 million or more.

Getting money out of China

Individuals can wire no more than $50,000 a year overseas, which can be problematic for wealthy citizens who want to leave.

According to a Bloomberg report last year, some ultra-rich Chinese citizens have been finding unusual, sometimes illegal, ways to move money in response.

The report said that funds can move through an informal, underground banking system known as "hawala." Those caught are typically fined 30% or more of the total amount that they had attempted to move.

"These agencies have sprouted to meet soaring demand," Joel Gallo, an adjunct professor of finance at New York University Shanghai, told Bloomberg. "They act as quasi-banking firms, yet operate without the scrutiny of one and adroitly engage in regulatory arbitrage by standing in a gray zone.

Others are using virtual private networks to export their wealth in the form of crypto, which has been banned in China since 2021.

Reuters reported that one finance executive used bank cards from small commercial banks to buy cryptocurrencies through gray-market dealers. He then capped each transaction at $6,978 to avoid alerting regulators.

Brown, the expert at King's College London, said the loss of wealth in China shouldn't be overstated.

"It is still OK to be rich in China, if a bit less so than in the past. But it's probably more advisable to be low profile and very loyal in public to the Communist party — and to get rich working in high-tech sectors that the government favors."