In Singapore, as rich Chinese nationals have sought to park money in the nation’s financial system discreetly, regulators have asked banks not to discuss the origins of large quantities of wealth flowing into the nation over the past year, according to a report in the Financial Times on Friday.
The central bank of Singapore, the Monetary Authority of Singapore (MAS) delivered the off-the-record directive amid a banking sector meeting in February, according to the outlet, which cited multiple sources in attendance.
The Financial Times noted the MAS told banks they should not single out any particular markets which inflows might be originating from in their reports. Although the central bank did not cite China by name, it noted that fund flow growth was being “driven by high-net-worth individuals from different regions.” The sources said that it was clear the central bank was referring to China.
Singapore is home to a massive financial services sector, which has led to it sometimes being referred to as the “Switzerland of Asia,” due to its refusal to take sides as tensions grow between the United States and China. For 15 years in a row, the region has been named by the Economist Intelligence Unit as the best place to do business. Many wealthier Chinese nationals view it as a safe haven to park assets in as their government at home launches crackdowns on corruption.
On the island, the wealth flow into the country has become a politically sensitive topic, as it has driven up the cost of living for locals. It is primarily for that reason the central bank has sought to keep a discussion of the phenomenon to a minimum.
A source added, the regulator has told the banks, “just quietly do your job” because “you don’t want to antagonize.”
Al Jazeera reported last month that nearly a quarter of luxury home sales in Singapore in 2022 were attributable to buyers from Mainland China, outnumbering US expats by a factor of two to one. Over the past few years, the number of so-called family offices, which are set up by private wealth management companies for rich individuals and their relatives to store wealth, has skyrocketed, with the major share of them from China, according to the FT.
Much of the impetus for the inflows are the government crackdowns on corruption in China, which have extended into many spheres in the nation, from state-linked organizations to private-sector companies.