China's wealthy are increasingly turning overseas for business investment opportunities.

C-suite executives in China are increasingly opting for business jet travel instead of high-net-worth individuals, according to Paul Desgrosseilliers, general manager at ExecuJet Haite General Aviation Services. On Aug 27, ExecuJet Haite launched their service center at Beijing Daxing International Airport to pursue business opportunities abroad rather than solely seeking investment returns, according to asset managers and consultants. According to Ryota Kadogaki of Monolith-Japan Consulting firm for family offices there has been an “extremely significant” spike in requests from Chinese family offices wanting to acquire smaller Japanese firms said this year by many Chinese family offices who wish to purchase those assets within Japan, according to Kadogaki himself as co-founder/Global CEO and Global CEO for family offices of Monolith based family office consulting firm for family offices located there in Japan he mentioned this trend as being “very significant.” “I am studying Chinese myself and considering hiring Chinese speakers as soon as possible for my company,” he noted, noting how slower Chinese growth and weaker Japanese yen contributed to his increased enthusiasm. Even with its recent strengthening to approximately 20 yen versus Chinese yuan, this exchange rate remains weaker than 15 seen in 2020.Mainland Chinese investors increased nonfinancial direct investments overseas by 16.2% between January and July according to Ministry of Commerce data. “Many of our clients are China-rooted entrepreneurs looking to globalize,” explained Grant Pan, CFO of China-based wealth management firm Noah Holdings, as quoted on CNBC. “Clearly they’re keeping an open eye out for opportunities worldwide despite domestic market slowdown pressures for many industries. Many of our clients appear busier than ever,” he noted. “To access new markets, investors travel more frequently – which gives them a clearer idea of global allocation strategies. Noah Holdings reported an increase of 23% year over year to more than 16,800 registered clients as of June’s end.” Noah saw its active overseas client count rise 63% year over year to 3,244. Overseas assets under management increased nearly 15% year on year to $5.4 billion while mainland China assets under management dropped over 6%, as reported in their quarterly earnings report. China holds tight control on capital with an official limit of $50,000 in overseas foreign exchange a year for residents living there, according to Noah. That has caused wealthy Chinese to seek alternative strategies for increasing wealth outside of China, according to Kadogaki, and buying foreign companies is one way they do this. As Kadogaki explained, an investor that has invested in Chinese tech firms may now look to open stores in Japan in order to increase potential revenue streams. His company began working with Canopy – a Singapore-based wealth management software platform used by numerous China-related funds – in June 2023 to localize them within Japan. “Canopy can act as a bridge to help clients invest in Japan,” according to Mr. Hoey. Currently, its system supports English, simplified Chinese (simplified), traditional Chinese and German as language options for investing in Japan. Canopy Wealth Group claims it works with more than 300 custodians with assets exceeding $160 billion reported. After the post-Covid rush, Canopy is making a “rational shift”, according to Mu Chen, Executive Director at Canopy. “Generally we deal with professionals that help manage wealth owners’ funds,” explained Mu. “According to their accounts, Chinese clients experienced rapid interest growth after Covid–through early last year–though in 2022-2023 this may have been more of an initial reactionary response,” according to this executive. “Now it is becoming more rational. More families are planning not only assets globally but assets, businesses and families globally using Hong Kong or Singapore as bases to look more widely out.” “Chinese companies’ keenness on investing their wealth abroad for potential business opportunities has driven much of this interest among Chinese nationals, which has witnessed rapid international expansion over recent years.” Reducing domestic growth after years of rapid expansion. Contrast that with earlier Chinese entrepreneurs who predominantly sought global markets by exporting Chinese-made goods or buying overseas real estate. Noah Holdings’ Pan noted how some of their more affluent clients have set up offices or alternative residences abroad while still remaining close to China operations. “Many entrepreneurs don’t differentiate clearly between business and family life,” Pan said. “They gain wealth by running these enterprises while sometimes injecting capital back [to their family].” Wealthy Chinese residents’ efforts to expand into global markets can be seen through an increase in private, international travel. “Chinese conglomerates have experienced considerable expansion across Southeast Asia, the Middle East, and Africa over the last several years; as a result of which executives from China need long-range aircraft.” said Paul Desgrosseilliers of ExecuJet Haite General Aviation Services; which runs maintenance centers for private planes. On Aug 27 as part of its multi-year plan ExecuJet Haite opened their maintenance, repair, and operations center at Beijing Daxing International Airport for private plane maintenance needs. He used an example from China wherein an older founder felt no compulsion to globalize his seasoning products business or wealth planning strategies, yet younger generation founders/entrepreneurs of said firm tend to think more globally and plan accordingly for both their business and wealth plans. “However, as their young successors think more globally minded they also consider globalizing [their business].”