Wealthy Chinese citizens are moving their money abroad: "buying beachfront condos in Cyprus, paying big U.S. tuition bills for their children and stocking up on luxury goods in Singapore, frequently moving cash secretly through a flourishing network of money-transfer agents."
Last 12 months, estimates the WSJ, 3% of China's GDP slips overseas this way.
Two ways of looking at this:
- When locals move cash, it's because they fear a crash, and who knows the local situation better?
- The rich fear for their wealth in China. They know they've amassed "too much" and/or they know the Party won't do what is necessary to protect it with rule of law (see, Bo Xilai).
Either way, not a good sign.
After all these years of do-nothing Hu, Xi is going to be under tremendous pressure to fix things.