Chinese Money Flows into Hong Kong Again

Hong Kong is again attracting mainlanders with deep pockets

In April this year a huge money-laundering scandal rocked Singapore -- where 10 Chinese nationals were charged with laundering US$2.2 billion involving real estate, watches, luxury handbags, jewellery, and lots of bottles of alcohol.

It was revealed in court that these men, with passports from Vietnam, Vanuatu, Cyprus and Dominica managed to live a crazy rich Asian lifestyle in the Lion City, paid for by money made from scams and online gambling.

The fact that they were able to live in Singapore without any scrutiny for years shocked residents and resulted in a massive review in policies, particularly banks tightening rules, particularly around clients with multiple passports.  

As a result, the Chinese are moving their money by the truckloads back to Hong Kong, where there is less scrutiny of the source of wealth.

How much is coming in? US$44 billion, three times the amount last year. 

With lots of money, come the wealth managers and banks in Hong Kong are on a massive hiring spree these days.

Swiss private banker Julius Baer has expanded its office space by 40 percent to house all the staff they are adding, while Bank of Singapore in Hong Kong is boosting its number of staff by 30 percent. Standard Chartered wants to double its staff in wealth management, and same with Citigroup.

It's also not just the uber wealthy looking to move their money to Hong Kong, but even those with assets ranging from US$5 million to US$10 million.

The Hong Kong government is also enticing the rich to come over -- those who invest HK$30 million in the city can get residency -- and 500 have applied.

However the tricky part is for banks to verify the applicants' assets over the past 24 months, which won't be easy.

Nevertheless, it seems that the wealth management sector in Hong Kong is seeing lots of dollar signs in the long run.

"I'm getting three to four calls daily from clients regarding immigration-related matters including the capital investment entrant scheme," said Patrick Yip, vice-chair for Deloitte China. "Many of the wealthy Chinese are looking for options. They want to be able to travel with a 'user-friendly' passport and get education overseas for their kids."