Slowing economy forces more Chinese citizens into Malaysia, US and other places

China’s economy is slowing. The Chinese government is targeting an economic growth rate of 5.0 per cent in 2024, with China watchers terming the goal ambitious that may necessitate additional stimulus measures. The continued slowdown in growth, particularly after the second quarter numbers, has led Goldman Sachs to revise its forecast for China’s 2024 growth downwards, from 5.0% to 4.9%.

The slowdown is having a ripple effect on China’s society, both urban and rural, triggering fears of hardships among its population. And the Xi Jinping government’s heavy-handed business policies are being blamed for driving a significant number of its citizens to seek new opportunities abroad. Countries like Malaysia and the United States are witnessing, as a result, an unprecedented influx of Chinese migrants, transforming local communities and economies.

Bloomberg has reported that more than 1.1 million people have left China since 2019. The emigrants are motivated by an economic downturn and disillusionment with Xi Jinping’s increasingly coercive rule, it said.  

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Interestingly, China doesn’t publish data on emigration. Figures compiled by the United Nations show an annual net migration of over 191,000 in the decade through 2019. However, it has climbed to more than 310,000 in 2022 and 2023

Migration to Malaysia

In recent years, the number of Chinese citizens living in Malaysia has nearly doubled, spurred by an increase in students and new investors. The Financial Times quoted Ngeow Chow Bing, director at the Institute of China Studies at the University of Malaya, as saying that there are “easily 150,000, and it could even be 200,000” Chinese citizens in Malaysia, up from about 82,000 in 2022, which he termed a “very conservative estimate”.

Most of the new Chinese arrivals in Malaysia are middle-class families and students. The country’s centuries-old Chinese diaspora, which makes up about 23 per cent of its 34 million citizens, makes Malaysia an attractive destination. Chinese citizens form the largest group of foreign students and long-stay residents in Malaysia, drawn by lower fees and less competition for university places compared to the West. The higher education institutions in Malaysia had 44,043 Chinese students enrolled last year, a 35 per cent increase from 2021.

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Chinese investors are also contributing to this boom. There are about 45,000 owners, managers, and workers of Chinese companies in Malaysia, up from an estimated 10,000 in 2021. These investors are primarily involved in electronics and electric vehicle industry suppliers, seeking to increase capacity outside China to evade US tariffs.

Illegal migration to the United States

At the same time, the United States has seen the largest wave of illegal border crossings by Chinese immigrants in history. Over the past 18 months, US authorities have encountered more than 55,000 Chinese migrants crossing illegally from Mexico, a sharp increase from 3,813 in 2022, the Washington Post reported recently. This journey, known in Chinese as “zouxian” or “walking the line,” involves a perilous trek across multiple countries and challenging terrains.

Many of these migrants are fleeing economic stagnation and political repression in China. The strict Covid-19 lockdowns and China’s unemployment crisis have exacerbated these issues, driving more people to seek asylum in the US. However, the journey is fraught with dangers, including exploitation by global smuggling networks and harsh conditions during transit.

It’s not limited to Malaysia and the US

The recent wave of Chinese emigration is not limited to Malaysia and the US. Countries like Vietnam, Japan, and Thailand are also experiencing an influx of Chinese migrants. In Vietnam, Chinese business owners are setting up operations to support American tech giants in diversifying their supply chains. This has led to the development of prosperous Chinese enclaves in areas previously dominated by local industries.

Japan has eased immigration restrictions to attract entrepreneurs and investors, resulting in a noticeable increase in Chinese residents in regions outside major cities. The introduction of long-term residency visas in Thailand has also contributed to the rise in Chinese immigrants, transforming local communities and economies.

There is another noticeable trend in Chinese emigration. Wealthy Chinese nationals are choosing destinations such as Singapore and Malta where they acquired citizenship through investment. They also form the largest source of golden visa applicants in Portugal and Greece.  

But the middle-class Chinese nationals take the arduous and illegal routes — passing through several countries, particularly in Latin America — to present themselves at security points at the US-Mexico border. They often declare that they face a threat of persecution by the Chinese authorities if they go back home. This allows them to stay and work in the US until their cases are decided by courts, which are clogged with such litigations.  

The Bloomberg report said that Chinese outmigration is crowding out local merchants Bangkok downtown streets, industrialising parts of rural Vietnam and bolstering beach-side villa values in Japan.  

Thailand reportedly now houses about 130,000 Chinese migrants, with the number of arrivals rising in recent years, thanks in part to the introduction in 2022 of a long-term residency visa.  

Three years of harsh Covid Zero restrictions and a subsequent crackdown on property speculation is said to be driving down home prices and away wealthier Chinese to more welcoming places, and less affluent to countries where they hope to have a better future.

A new China tension in foreign societies

The influx of Chinese migrants is bringing both challenges and opportunities to local communities. In Malaysia, the growing number of Chinese residents is expected to have a significant impact due to the country’s smaller population and more sensitive ethnic divisions compared to its neighbours like Thailand. Malaysia’s Chinese diaspora has not fully assimilated, and the Muslim Malay majority is resistant to any increase in the influence of ethnic Chinese residents.

In the US, the illegal Chinese migrants primarily settle in areas with large Chinese-speaking communities, such as the Flushing area of Queens, New York. This neighbourhood has surpassed Los Angeles as the top destination for the most recent Chinese migrants, who are drawn by the availability of jobs, housing, and assistance with asylum claims.

Chinese migrants are, however, also contributing economically to their host countries. In Malaysia, for example, Chinese investors and entrepreneurs are actively involved in various industries, including electronics, electric vehicles, and agriculture. A representative of the China Entrepreneurs Association in Malaysia highlighted the arrival of new people every week, particularly those seeking to expand their businesses outside China.

But the presence of Chinese migrants has also sparked social tensions. In Thailand, social media is rife with complaints about Chinese newcomers disregarding local norms and flouting visa rules. Critics argue that Chinese-owned businesses do not significantly benefit the domestic economy as they source their labour, raw materials, and merchandise from China.

There is no denying that China’s economic downturn and political climate are pushing more of its citizens to seek better opportunities abroad. Countries like Malaysia and the United States are witnessing significant increases in Chinese migrants, as a result, but not always with a pleasant outcome. As this trend continues, it will be crucial for host countries to manage the influx effectively, with the focus to address social tensions and integrate new arrivals into local communities.