Chinese wealth investors seek safety amid economic turbulence

[WORLD] China’s high-net-worth investors prioritised “safety” in 2024 amid a period of economic turbulence, according to a new report, and analysts expect the trend to continue as US President Donald Trump’s tariff war sends shock waves across global markets.

The ongoing trade tensions between the U.S. and China have exacerbated market uncertainties, with retaliatory tariffs affecting key sectors such as technology, manufacturing, and agriculture. This has led many wealthy investors to adopt a defensive strategy, shifting away from volatile equities and into more stable holdings. Economists warn that prolonged trade disputes could further dampen investor confidence, particularly in export-driven economies like China.

The survey by data and analytics firm GlobalData found that 27 per cent of high-net-worth Chinese investors parked their wealth in low-risk assets like cash, near-cash products and bonds last year, as they waited for the economic storm clouds to blow over.

This flight to safety mirrors a broader regional trend, with affluent investors across Asia-Pacific increasing their allocations to fixed-income instruments and gold. Analysts attribute this shift not only to geopolitical risks but also to slowing GDP growth in major economies, including China, where policymakers have been grappling with a property market downturn and subdued consumer spending.

This cautious stance “opens the door for private wealth managers to guide clients towards undervalued investments”, the company noted.

Some financial advisors are now recommending structured products and dividend-paying blue-chip stocks as a middle ground for risk-averse clients seeking modest returns. Additionally, there’s growing interest in alternative assets such as private equity and venture capital, particularly in sectors like renewable energy and healthcare, which are seen as more resilient to trade-related disruptions.

However, not all high-net-worth individuals are retreating entirely from risk. A segment of younger, tech-savvy investors continues to explore opportunities in digital assets and AI-driven startups, betting on long-term growth despite short-term volatility. This divergence highlights the varying risk appetites within China’s wealthy demographic.

Looking ahead, market watchers suggest that any de-escalation in U.S.-China trade tensions—or signs of stronger domestic stimulus—could prompt a gradual return to higher-risk investments. Until then, wealth managers are likely to emphasize diversification and capital preservation as key strategies for their clients.