China is experiencing a significant capital flight as wealthy individuals leave the country in response to repressive policies and a collapsing property market. An estimated 15,200 millionaires are expected to exit China this year, with a staggering US$738 billion drained from the economy in the third quarter of 2022 alone.
As the Communist Party enforces strict capital controls, ultra-wealthy Chinese are finding ways to circumvent these rules, leading to a 'mass exodus' to countries like the United States, Singapore, and Japan. The property market's collapse has left many with diminished household wealth, forcing a reevaluation of investment strategies, with the stock market being one of the few remaining options.
Meanwhile, in Europe and the United States, consumer behavior diverges sharply post-pandemic. The eurozone's household savings rate has climbed to 15.7%, while American consumers are driving economic recovery with a savings rate of only 5.2%. This difference is reflected in stock market dynamics, as the U.S. market benefits from increased consumer spending and a robust job market.
The OECD forecasts U.S. GDP growth at 2.6% for 2024, fueled by strong consumer confidence and high property prices, which have boosted household wealth. In contrast, the eurozone is expected to grow by only 0.7%, indicating a more cautious economic landscape.