Wealthy Chinese Are Facing Difficult Choices Amid China’s Stock Market Crash, Experts Say

Expert suggests upper-middle and middle-class Chinese are fleeing China with their money as the country enters pervasive impoverishment.

The continuing stock market crash in China this year has caused countless ordinary mainland Chinese investors to suffer heavy losses.

Experts pointed out that even wealthy Chinese are gradually being deprived of their property in different ways by the Chinese Communist Party (CCP). They may choose to flee the country or to fight back.

China’s stock market has continued to plummet since the new year, with the Shanghai Stock Exchange Index reaching 2,635 points before the lunar new year holiday started on Feb. 9, the lowest in years, while thousands of stocks hitting limit down.

Now 200 million Chinese stock investors have been wailing on social media about their heavy losses and took to the U.S. and Indian embassies social media accounts to plead for help to save the values of their investment.

Investors’ Predicament

Major Chinese financial media Caixin reported on Feb. 7 that Cao Xin, the founding partner of Tianli (Shanghai) Asset Management Co., Ltd., “passed away due to personal mental health reasons” on Jan. 31, which has attracted wide attention as his company is a major investor of Chinese stocks. He was only 34 years old.

According to the information from the investment industry on Chinese social media, Mr. Cao’s suicide was driven by the stock market crash. His funds supply chain was cut off due to the sharp decline in the stocks he held. It’s also said that Mr. Cao borrowed huge funds from loan sharks to try to equalize the funds due to the cutoffs. However, the Chinese stock market plummeted further, leading to the loss of funds and he couldn’t repay the loan.

Xiao Yu, the legal person of Shanghai Tianmei Network Technology Co., Ltd., revealed in a video on his social media account that he has lost more than 5 million yuan ($703,000) in stock trading in the past 10 years. He currently has no house, no car, is unmarried, and has a debt of 3.5 million yuan ($492,000). He said that he was so desperate that he once planned to go to the Shanghai Stock Exchange to take action for revenge. He also attempted suicide several times because of the loss in the Chinese stock market.

He said in the video, “Today’s A-share market is in a long and bearish period. It is testing everyone, and even every family’s total wealth.”

Statistics show that among China’s 1.4 billion population, 600 million Chinese have a monthly income of only 1,000 yuan, and 900 million people have a monthly income of less than 2,000 yuan.

It’s estimated 200 million Chinese invested in China’s stock market.

Frank Xie, associate professor of marketing at University of South Carolina Aiken and a columnist for The Epoch Times, wrote on Feb.9: “People who have disposable income that can buy and invest in stocks are already the middle- and upper-middle class in Chinese society. This should be the real pillar of the Chinese economy and the main body of consumption. These wealthiest Chinese, excluding the top elites and the groups at the top of the CCP, are the primary targets for the CCP to exploit.”

“Ordinary investors in China have little access to real information. The CCP and the powerful control the media and the right to speak, and deceive the people day after day to lure flocks of individual Chinese investors in,” he wrote.

Amid the stock market meltdown, the CCP’s securities regulator put out new restrictions on Feb. 7, banning short-selling, only allowing buying stocks.

A man wearing a mask walk past the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, on Feb. 3, 2020. (Aly Song/Reuters)
A man wearing a mask walk past the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, on Feb. 3, 2020. (Aly Song/Reuters)

Fleeing

Taiwanese financial expert Huang Shicong told The Epoch Times on Feb. 12 that now China’s real estate, stock market, and financial products have all fallen, and even the renminbi has depreciated. “In addition, government policies are suppressing the rich, and the wealthier class have the direct experiences of it.”

“This kind of incidents of agents or company executives jumping off the buildings or dying accidentally are constantly happening in China, which shows that the wealthy Chinese is quite uneasy under the [CCP’s] leadership of Xi Jinping.”

Yuan Hongbing, an Australia-based scholar, told The Epoch Times on Feb. 12 that in the view of the CCP leader, the stock market has only one role, which is to finance the CCP’s state-owned enterprises. “Whether China’s rich or middle class still want to maintain their wealth according to the past thinking model, it is completely impossible. Due to the rapid decline of the entire Chinese economy, the overall trend of impoverishment of the Chinese people has begun.”

People walk across a bridge with a stocks indicator board in the financial district of Lujiazui in Shanghai, on Oct. 17, 2022. (Hector Retamal/AFP via Getty Images)
People walk across a bridge with a stocks indicator board in the financial district of Lujiazui in Shanghai, on Oct. 17, 2022. (Hector Retamal/AFP via Getty Images)

Mr. Huang noted that the CCP continues to strengthen the party-state system by harvesting various industries and pushing the wealthy to the opposite side. Meanwhile, it firmly controls the party, government, military, secret agents, and media. People have no effective way to fight back except to escape. “Only when people leave China with their money, they are safe.”

However, Mr. Yuan pointed out that not everyone can escape, and the CCP’s perverse actions will eventually trigger resistance in the country. “Every policy implemented by Xi Jinping now is pushing China’s domestic politics onto the path of national resistance and popular uprising.”

Ning Haizhong, Luo Ya, and Fang Xiao contributed to this report

 

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