Swiss Paper: China Squeezes Its Rich as They Seek Refuge in Europe
Swiss newspaper Neue Zürcher Zeitung reports that Chinese authorities are increasingly extracting money from wealthy citizens, who are trying to move assets to Europe. Latvian Prime Minister Andris Kulbergs has previously proposed attracting foreign wealthy people with lower taxes.
The Swiss newspaper Neue Zürcher Zeitung (NZZ) published an article on 8 October saying that pressure on the wealthy is growing in China because state coffers are empty. Latvian daily Neatkarīgā links the report to Andris Kulbergs, Latvia's new head of government, who before the election proposed attracting wealthy foreigners.
What NZZ reports
The paper says China has more than 500 billionaires. The article opens with the story of an unnamed multimillionaire. Local officials regularly visit him demanding money, citing rule violations even though, he says, neither such rules nor violations exist. The 54-year-old businessman now wants to move his wealth to Europe to protect it from confiscation and eventually pass it to his children.
NZZ explains that the collapse of the property market several years ago set off a chain of insolvencies. Local governments were hit hardest, as their spending had relied on revenue from selling land to developers. Many have failed to pay wages to officials, teachers and transport drivers. The paper also cites China's total debt, which it says exceeds 300 percent of the size of its economy.
International data exchange
China's government uses the Common Reporting Standard (CRS), an international system in which countries exchange information on foreigners' bank accounts. Latvia joined in 2016, and in 2023 the Finance Ministry told parliament that Latvia receives data from 100 countries. NZZ notes that the sums collected from wealthy Chinese are not enough to cover state and private debts.
Kulbergs' plan
At a discussion organised by the Bank of Latvia on 24 February, Kulbergs, then in opposition, said the growth of public debt could be curbed by attracting the world's wealthy with reduced tax rates. Uldis Rutkaste, head of the central bank's Monetary Policy Department, cautioned that countries increasingly oppose tax havens, so the prospects of such a business are limited. Whether the new government will carry out the plan is not yet known.
