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China’s wealthy are looking overseas for business investment

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Instead of high-net-worth individuals, C-suite executives in China are increasingly using business jets, said Paul Desgrosseilliers, general manager at ExecuJet Haite General Aviation Services. The company opened a new service center at Beijing Daxing International Airport on Aug. 27, 2024.

ExecuJet Haite

BEIJING — China’s wealthy are increasingly looking for ways to move capital outside the mainland to pursue business opportunities, rather than just chasing investment returns, according to asset managers and consultants.

This year, there’s been a “very significant” trend of requests from Chinese family offices that want to acquire smaller businesses in Japan, said Ryota Kadogaki, co-founder and global CEO of Monolith, a Japan-based consulting firm for family offices.

“I’m studying Chinese as well, and I’m thinking to hire Chinese speakers in my company right now,” he said, noting that slower growth in China and a weaker Japanese yen are supporting the increased interest. Even with recent strengthening to around 20 yen versus the Chinese yuan, that’s still weaker than the 15 level seen in 2020.

Investors based in mainland China increased their non-financial direct investments overseas by 16.2% to the equivalent of $83.55 billion during the January to July period, according to the Ministry of Commerce. It said the investments covered more than 6,100 businesses in 152 countries and regions.

“Most of our clients are China-rooted entrepreneurs who are looking to further globalize,” Grant Pan, CFO of China-based wealth management firm Noah Holdings, told CNBC. “Obviously they are at least keeping their eyes open for opportunities for their businesses all over the world. Obviously there’s slowdown pressure in terms of domestic markets for many industries.”

China needs 'more aggressive' monetary easing, says Deloitte China

“Many of our clients appear to be busier than before,” he said. “As they are exploring new markets, they travel more frequently, which more or less gives them a better perspective of global allocation.”

Noah Holdings said the number of its overseas registered clients rose by 23% from a year ago to nearly 16,800 as of the end of June. The company’s active overseas clients rose by nearly 63% year on year to 3,244.

Overseas assets under management rose nearly 15% to $5.4 billion from a year earlier, while mainland China assets under management fell over 6% to $15.8 billion, according to Noah’s quarterly earnings report.

Mainland China keeps a tight control on capital with an official limit of $50,000 in overseas foreign exchange a year. That’s meant affluent Chinese have long looked for alternative ways to grow wealth outside the country.

Kadogaki noted that buying foreign companies is a way for Chinese investors to move assets abroad. He also shared examples of how a fund investing in a tech company in China might now look to acquire a retail store in Japan to expand potential revenue.

In June 2023, Kadogaki said his company started working with Canopy, a Singapore-based wealth management software company working with many China-related funds, to help them localize in Japan. “We can be a gateway for their clients to invest in Japan,” he said.

Right now, Canopy says its system supports English, simplified and traditional Chinese and German. The company claims it works with more than 300 custodians with more than $160 billion in assets under reporting.

A ‘rational’ shift after the post-Covid rush

“Typically we deal with the professionals that help manage the money for the wealth owners,” said Mu Chen, executive director at Canopy. “What we are hearing from them is that the fastest growth in terms of interest from Chinese clients [occurred] in the post-Covid [period to] early last year.”

“In 2022, 2023, maybe it was more a reactionary behavior to think about going overseas,” he said. “I think now it becomes more rational and it’s more about these families, and these families planning not just their assets globally, but planning their assets, their business, their family globally using Hong Kong or Singapore as a base to look more outward.”

This interest in moving their wealth abroad to tap business opportunities comes as many Chinese companies have accelerated their global expansion in the last few years. That’s largely due to slower domestic growth, following years of rapid expansion.

That contrasts with how an earlier generation of Chinese entrepreneurs primarily tapped global markets by simply exporting China-made goods, or acquiring overseas real estate.

Noah Holdings’ Pan pointed out that many of the company’s affluent clients have set up offices and alternative residences in Hong Kong, Singapore or Japan as a way to explore global business opportunities while keeping proximity to China operations.

“Many entrepreneurs don’t have a very clear distinction between enterprise and family,” Pan said. “They get their wealth from operating such business and sometimes they inject capital back [to the family.]”

Affluent Chinese residents’ attempts to increasingly venture into global markets can also be witnessed in the demand for private, international travel.

“Whether it’s Southeast Asia, the Middle East, Africa, there’s been a lot of growth in these areas for Chinese conglomerates, so I think that the executives from China have a need to utilize [private] long-range aircraft … We see a lot of flights going there,” said Paul Desgrosseilliers, general manager at ExecuJet Haite General Aviation Services, which operates maintenance centers for private planes.

As part of a multi-year plan, ExecuJet Haite opened on Aug. 27 a maintenance, repair and operations center for private jets at Beijing Daxing International Airport. The center, which claims to be the largest for business aviation in Asia Pacific, can access a designated channel at the airport for international immigration processing and customs.

Tackling slower growth

Desgrosseilliers said international business jet flights across ExecuJet Haite’s other facilities at Beijing Capital Airport and in Tianjin have recovered, but not yet to pre-pandemic levels.

Major U.S. and Chinese corporations have also noted a slowdown in Chinese consumer demand in their second-quarter earnings.

The trend of affluent Chinese looking to expand their businesses globally is still in relatively early stages, and not every family will choose to go abroad, Canopy’s Chen said. He cited how a family of a seasoning products business in China, whose founder is getting older, didn’t feel the need to globalize their business or wealth planning.

“As the newer generations’ founders, entrepreneurs think more globally, they also think [about] their business more globally.”

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Buffett denies social media rumors after Trump shares wild claim that investor backs president crashing market

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Berkshire Hathaway responds to 'false reports' on social media

Warren Buffett went on the record Friday to deny social media posts after President Donald Trump shared on Truth Social a fan video that claimed the president is tanking the stock market on purpose with the endorsement of the legendary investor.

Trump on Friday shared an outlandish social media video that defends his recent policy decisions by arguing he is deliberately taking down the market as a strategic play to force lower interest and mortgage rates.

“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose,” alleged the video, which Trump posted on his Truth Social account.

The video’s narrator then falsely states, “And this is why Warren Buffett just said, ‘Trump is making the best economic moves he’s seen in over 50 years.'”

The president shared a link to an X post from the account @AmericaPapaBear, a self-described “Trumper to the end.” The X post itself appears to be a repost of a weeks-old TikTok video from user @wnnsa11. The video has been shared more than 2,000 times on Truth Social and nearly 10,000 times on X.

Buffett, 94, didn’t single out any specific posts, but his conglomerate Berkshire Hathaway outright rejected all comments claimed to be made by him.

“There are reports currently circulating on social media (including Twitter, Facebook and Tik Tok) regarding comments allegedly made by Warren E. Buffett. All such reports are false,” the company said in a statement Friday.

CNBC’s Becky Quick spoke to Buffett Friday about this statement and he said he wanted to knock down misinformation in an age where false rumors can be blasted around instantaneously. Buffett told Quick that he won’t make any commentary related to the markets, the economy or tariffs between now and Berkshire’s annual meeting on May 3.

‘A tax on goods’

While Buffett hasn’t spoken about this week’s imposition of sweeping tariffs from the Trump administration, his view on such things has pretty much always been negative. Just in March, the Berkshire CEO and chairman called tariffs “an act of war, to some degree.”

“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” Buffett said in the news interview with a laugh. “And then what? You always have to ask that question in economics. You always say, ‘And then what?'”

During Trump’s first term, Buffett opined at length in 2018 and 2019 about the trade conflicts that erupted, warning that the Republican’s aggressive moves could cause negative consequences globally.

“If we actually have a trade war, it will be bad for the whole world … everything intersects in the world,” Buffett said in a CNBC interview in 2019. “A world that adjusts to something very close to free trade … more people will live better than in a world with significant tariffs and shifting tariffs over time.”

Buffett has been in a defensive mode over the past year as he rapidly dumped stocks and raised a record amount of cash exceeding $300 billion. His conglomerate has a big U.S. focus and has large businesses in insurance, railroads, manufacturing, energy and retail.

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Stocks making the biggest moves midday: PLTR, CAT, AAPL JPM

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Powell sees tariffs raising inflation and says Fed will wait before further rate moves

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US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC on March 19, 2025. 

Roberto Schmidt | Afp | Getty Images

Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump’s tariffs to raise inflation and lower growth, and indicated that the central bank won’t move on interest rates until it gets a clearer picture on the ultimate impacts.

In a speech delivered before business journalists in Arlington, Va., Powell said the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday.

Though he said the economy currently looks strong, he stressed the threat that tariffs pose and indicated that the Fed will be focused on keeping inflation in check.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in prepared remarks. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

The remarks came shortly after Trump called on Powell to “stop playing politics” and cut interest rates because inflation is down.

There’s been a torrent of selling on Wall Street following the Trump announcement of 10% across-the-board tariffs, along with a menu of reciprocal charges that are much higher for many key trading partners.

Powell noted that the announced tariffs were “significantly larger than expected.”

“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said. “The size and duration of these effects remain uncertain.”

Focused on inflation

While Powell was circumspect about how the Fed will react to the changes, markets are pricing in an aggressive set of interest rate cuts starting in June, with a rising likelihood that the central bank will slice at least a full percentage point off its key borrowing rate by the end of the year, according to CME Group data.

However, the Fed is charged with keeping inflation anchored with full employment.

Powell stressed that meeting the inflation side of its mandate will require keeping inflation expectations in check, something that might not be easy to do with Trump lobbing tariffs at U.S. trading partners, some of whom already have announced retaliatory measures.

A greater focus on inflation also would be likely to deter the Fed from easing policy until it assesses what longer-term impact tariffs will have on prices. Typically, policymakers view tariffs as just a temporary rise in prices and not a fundamental inflation driver, but the broad nature of Trump’s move could change that perspective.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said. “Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”

Core inflation ran at a 2.8% annual rate in February, part of a general moderating pattern that is nonetheless still well above the Fed’s 2% target.

In spite of the elevated anxiety over tariffs, Powell said the economy for now “is still in a good place,” with a solid labor market. However, he mentioned recent consumer surveys showing rising concerns about inflation and dimming expectations for future growth, pointing out that longer-term inflation expectations are still in line with the Fed’s objectives.

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