China’s Wealthy Are Moving Beyond Investing and Seeking Global Business Opportunities
Chinese entrepreneurs and family offices are increasingly looking to expand their businesses beyond mainland China and invest in global markets, spurred by slower domestic growth and a desire for diversification. This shift marks a departure from the traditional focus on simply moving capital overseas for investment returns, with entrepreneurs now seeking active involvement in international businesses and operations.
Key Takeaways:
- Diversification Beyond Investments: Affluent Chinese are moving beyond simply investing their money abroad and are actively seeking to acquire and manage businesses in markets like Japan and Southeast Asia.
- Global Businesses, Global Families: Entrepreneurs are building global businesses and linking their family wealth to international opportunities, often using Hong Kong or Singapore as a base for cross-border activities.
- Private Aircraft Demand on the Rise: The demand for private jet services is growing, fueled by Chinese business executives traveling to international destinations for business expansion and global operations.
- Seeking New Growth Avenues: Slowing economic growth in China is driving the search for new opportunities in global markets, with companies seeking to tap into wider consumer bases and explore new industries.
A ‘Rational’ Shift After the Post-Covid Rush
While the initial movement of capital and entrepreneurial activity overseas was accelerated by the pandemic, the current trend reflects a more strategic and calculated approach. This evolution is driven by a recognition that global business expansion is integral to long-term growth and family wealth preservation.
### A Shift in Focus:
- The post-Covid period saw a surge in Chinese families moving their wealth abroad as a reactive measure.
- However, the current trend is characterized by a more deliberate and rational approach, with families focusing on building global businesses and managing wealth across borders.
Tackling Slower Growth
The slowing Chinese economy is a significant factor in the push for globalization. Companies are facing challenges in domestic markets and are actively seeking new markets and opportunities. This is leading to increased cross-border mergers and acquisitions, as well as direct investments in foreign businesses.
### Embracing Global Opportunities:
- The previous generation of Chinese entrepreneurs often focused on exports and real estate investments.
- Today’s newer generation, more comfortable with global markets, is proactively seeking direct business ownership and management in international markets.
A Growing Demand for Private Jet Services
The rise in cross-border business activity is reflected in the growing demand for private jet services. Executives are increasingly traveling to global destinations to manage their businesses and explore new opportunities.
### Fueling the Demand:
- The opening of a new maintenance, repair and operations center for private jets at Beijing Daxing International Airport highlights the increasing demand for private aircraft services.
- Chinese conglomerates are expanding into Southeast Asia, the Middle East, and Africa, spurring demand for long-range private flights.
This trend towards globalization is expected to continue in the coming years, as Chinese businesses and wealthy individuals seek to diversify their portfolios and tap into the growth potential of global markets. The shift represents a major adjustment in the way Chinese entrepreneurs and families engage with the global economy, potentially reshaping the investment landscape and creating new opportunities for international collaboration.
