Paul Desgrosselilliers, general manager of ExecuJet Haite General Aviation Services, said executive jets in China are increasingly being used by business jets rather than by high-net-worth individuals. The company opened a new service center at Beijing Daxing International Airport on August 27, 2024.
ExecuJet Haite Hotel
BEIJING — China’s wealthy are increasingly looking to move capital outside the mainland to pursue business opportunities, rather than just chasing investment returns, asset managers and advisers say.
Ryota Kadogaki, co-founder and global CEO of Monolith, a Japanese family office advisory firm, said there has been a “very significant” trend this year in requests from Chinese family offices to acquire small Japanese companies.
“I’m also learning Chinese, and I’m now considering hiring Chinese speakers in my company,” he said, noting that China’s slowing economic growth and the depreciation of the yen were supporting growing interest. Although the yen has recently appreciated to around 20 against the yuan, it is still below the level of 15 in 2020.
Mainland Chinese investors increase overseas non-financial direct investment Growth of 16.2%, equivalent to US$83.55 billion According to the Ministry of Commerce, from January to July. The announcement stated that the investment covers more than 6,100 companies in 152 countries and regions.
“Most of our clients are entrepreneurs who are rooted in China and looking to further globalize,” Grant Pan, chief financial officer of Chinese wealth management firm Noah Holdings, told CNBC. “Obviously, they are at least paying close attention to their Business opportunities around the world. Clearly, domestic markets are facing slowdowns in many industries.”
“Many of our customers seem busier than before,” he said. “As they explore new markets, they travel more frequently, which more or less gives them a better perspective on global configurations.”
Noah Holdings stated that its quantity Overseas registered customers As of the end of June, the number had increased by 23% year-on-year to nearly 16,800. The company’s overseas active customers increased by nearly 63% year-on-year to 3,244.
According to Noah’s quarterly earnings report, assets under management overseas increased by nearly 15% year-on-year to US$5.4 billion, while assets under management in mainland China fell by more than 6% from the same period last year to US$15.8 billion.
Mainland China imposes strict controls on capital, with an official annual overseas foreign exchange limit of US$50,000. This means wealthy Chinese have long looked for alternative ways to grow their wealth abroad.
Kadogaki pointed out that acquiring foreign companies is a way for Chinese investors to move assets overseas. He also shared examples of how funds investing in Chinese technology companies may now seek to acquire Japanese retail stores to expand potential revenue.
Kadogaki said that in June 2023, his company began working with Singapore wealth management software company Canopy Cooperate with many China-related funds to help them localize in Japan. “We can be a gateway for their clients to invest in Japan,” he said.
Currently, Canopy says its system supports English, Simplified Chinese, Traditional Chinese, and German. The company claims to work with more than 300 custodians Assets exceed US$160 billion Reporting now.
“Rational” transformation in the post-epidemic era
“We typically deal with professionals who help wealth owners manage their money,” said Mu Chen, executive director of Canopy. “What we hear from them is In terms of Chinese customer interest, the fastest growth period occurred after the COVID-19 epidemic early last year.
“In 2022 and 2023, considering going abroad may be more of a reactionary behavior,” he said. “I think it’s becoming more rational now and it’s more about these families not only planning their assets globally but planning their assets, businesses and families globally based in Hong Kong or Singapore to be more Develop outward.
As many Chinese companies have accelerated their global expansion in the past few years, they have become interested in moving their wealth overseas in search of business opportunities. This is largely due to slower domestic growth after years of rapid expansion.
This is in sharp contrast to the previous generation of Chinese entrepreneurs who explored global markets mainly by exporting Chinese-made goods or acquiring overseas real estate.
Noah Holdings’ Pan noted that many of the company’s wealthy clients have set up offices and alternative residences in Hong Kong, Singapore or Japan as a way to explore global business opportunities while maintaining strong ties to their China operations.
“Many entrepreneurs don’t make a clear distinction between business and family,” Pan said. “They gain wealth by running these types of businesses, and sometimes they inject capital into (the family).”
Wealthy Chinese residents are increasingly trying to tap into global markets, which is also reflected in demand for private international travel.
“Whether it’s Southeast Asia, the Middle East or Africa, Chinese conglomerates are seeing a lot of growth in those regions, so I think executives from China need to use (private) long-range aircraft… We’re seeing a lot of flights Go there,” said Paul Desgrosselilliers, general manager of ExecuJet Haite General Aviation Services, which operates a private aircraft maintenance center.
As part of a multi-year plan, ExecuJet Haite opened a private aircraft maintenance, repair and operations center at Beijing Daxing International Airport on August 27. The center claims to be the largest business aviation center in the Asia-Pacific region and can handle international immigration and customs procedures through designated airport passages.
Coping with slowing growth
Desgrosseilliers said international business jet flights over ExecuJet Haite’s other facilities at Beijing Capital Airport and Tianjin have resumed but have not yet returned to pre-pandemic levels.
Canopy’s Chen said the trend of wealthy Chinese seeking to expand their businesses globally is still in a relatively early stage, and not every family will choose to go abroad. He cited the case of a condiment company family in China whose founder was aging but did not feel the need to globalize its business or wealth planning.
“As a new generation of founders, entrepreneurs are thinking more globally, and they are thinking more globally about their businesses.”
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