Chinese residents transferred an all-time high amount of funds to Canada last year as the global pandemic spread and the government in Beijing cracked down on the pro-democracy movement in Hong Kong.
As China imposed a sweeping national security law in Hong Kong last year, residents of that city moved a record $43.6 billion in electronic fund transfers to Canada, according to FINTRAC, Canada’s anti-money laundering agency. FINTRAC receives reports on any money transfers into Canada of more than $10,000.
Tens of thousands of Chinese citizens continue to move to Canada each year for university and to retire. Capital flows from Hong Kong banks to Canadian financial institutions were at their highest level on record in 2020, according to FINTRAC.
The outflows to Canada are the first evidence of a significant flight of capital overseas from Hong Kong, which is widely viewed as the financial hub of Asia.
The record money transfers, which were up 46% from 2016 and up 10% from 2019, came in a year when Hong Kong police froze the accounts of several people linked to pro-democracy protests, prompting concerns among residents about asset security.
The outflows represent only 1.9% of Hong Kong’s total bank deposits in 2020. But, at the same time, the FINTRAC data captures only a fraction of total legal inflows into the Canadian economy because many transactions are not included, such as transfers of cryptocurrencies and transfers of less than $10,000, said FINTRAC in a written statement.
