My old firm has for several months seen a steady exodus by the owners of private Chinese companies. Out of the nearly 300 Chinese clients, more than half have sold their companies and emigrated.
China has thousands and thousands of private companies, that remained owned and operated by the original founder and owner, what my old company has been seeing is NOT a trend, but the exception. What my old employer is seeing is particular to its clients. A certain type of company owners were attractive as investors, and they shared certain traits. They dealt with manufactured inputs and exported complex intermediate outputs. Both sides of the equation were difficult to price.
Although auditing is required in China, it bears no resemblance to what we understand as auditing in the West. What Chinese companies consider audited statements would be called management accounts here in the UK, and would not be considered audited, following standard GAAP rules.
Foreign exchange requirements are approved by the Chinese government, and approval is withheld for a variety of reasons, some economic others political. Therefore not always available when needed
Foreign travel by senior company officials was from time to time, restricted.
Various levels of government regularly inspected and fined these private companies.
The absence of proper audits means that companies can dissimulate profits. Over the past 20 years, most private Chinese companies have sought to extract profits outside of China, via transfer pricing. Increasing the cost of inputs and reducing the sales price to the Chinese company, thereby retaining the profits offshore. This mostly began because of the vagaries of foreign exchange availability. Forced private companies to maintain reserves overseas.
Their departure from China was long planned, but delayed by COVID, now is a catch-up phase. The owners bought their exit visas from the bureaucrats (civil or military) by giving them their old businesses. Their wealth did not leave China with them. It was never there. Instead, it was invested in British, German or American banks.
Nevertheless, China is a massive country. What we are seeing is the "news headlines" of extreme changes are sensationalist reporting of what is really a very slow decline. China still has a very large population. It is still and will remain an important player.
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