Wealthy Chinese individuals are reportedly reducing their holdings in local securities and are increasingly considering assets in the US and elsewhere overseas to mitigate future risks following the domestic financial markets rout caused by harsh Zero COVID Dimensions.

What happened: That pattern is likely to gain momentum in 2023, Reuters reported, citing fund managers and industry sources.

Amid the bleak domestic return outlook, hedge funds with Greater China strategies are down 12.9% for the year to the end of November and are on course for their worst year since 2011, the report said, citing Eurekahedge data.

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Rich Chinese are also worried Xi Jinping‘s “shared prosperity” drive to reduce income inequality, wealth managers said.

Chinese equities were not spared in a year marked by negative returns across assets. Domestic equities saw additional strain in the form of zero-COVID policies, leading to sweeping lockdowns across China.

For example, Stocks listed in Hong Kong how alibaba group holding ltd BABA lost over 24% since the beginning of the year, while Nio Inc NEVER lost over 43% in the same period.

During the same period, the SPDR S&P 500 ETF Trust SPY lost over 19% during the Vanguard Total Bond Market Index Fund ETF BND lost over 12%.

Experts take: Jason HsuFounder and Chairman of Rayliant Global Advisors, Reuters said, “In the past, wealth creation for these people wasn’t about buying American stocks or American real estate…it’s starting to change.”

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