Since last summer, volatility in Chinese financial markets has sparked a flight of capital from the mainland that totaled roughly $1 trillion by year-end, according to some estimates. One source of this money is the country’s ever-growing high-net-worth population, whose desire to diversify their investments and preserve capital has created opportunities for foreign wealth managers.

Although concern over China’s financial system remains a powerful market narrative, there are many reasons Chinese companies and individuals might choose to cash out. A study published by the Bank for International Settlements in March concluded that a large portion of recent outflows were the result of Chinese companies moving aggressively to retire U.S. dollar– denominated debt; other analysts have cited the closure of carry trade positions by institutional investors.

No one knows how much of the capital leaving the mainland represents wealthy households shifting assets, but the outsize impact of Chinese buyers on luxury property markets in the U.S., the U.K. and Australia in recent years gives some indication.

There’s plenty more money where that came from. Bain & Co. estimates that as of last year China was home to more than 1 million wealthy individuals, which the consulting firm defines as those with more than $1.5 million in invested assets. Their combined riches: almost $5 trillion. Many of those investors are seeking greener pastures elsewhere.

For companies and affluent families, Hong Kong plays a key role in shifting assets from the mainland. The semiautonomous region is part of China but retains control over domestic and economic policy. “There may be short-term impact due to negative market sentiment given the stock market sell-off and the renminbi’s depreciation,” says Ivan Wong, HSBC Private Bank’s Hong Kong– based head of investment services and product solutions for Asia. “The implication in the longer run can be more positive, given that Hong Kong has always been a gateway for outbound investment for Chinese investors due to the established legal and tax frameworks.”

Although officially limited to $50,000 a year in offshore transfers, wealthy Chinese investors have become adept at moving money into other currencies. In addition to aggregating the capital limits of family and friends unable to take advantage of the transfer allowance, many investors have exploited less savory routes in the past. One popular avenue involved the use of gambling junkets to the casinos of Macau, the neighboring offshore center, to shift yuan to Hong Kong and beyond, but the anticorruption campaign unleashed by Xi Jinping after he became president in 2013 has largely shut down that option.

The search for new and more creative mechanisms to funnel wealth overseas continues, though. In January, China UnionPay, the nation’s sole credit card administrator, began to limit available credit for cardholders traveling abroad, according to one senior executive at a primary Chinese bank. The move came after Chinese nationals began using high-limit cards to purchase U.S. dollar–denominated annuities in Hong Kong and elsewhere to skirt rules capping foreign currency holdings.

Since the crackdown on insurance products, wealthy Chinese have sought new avenues to use credit to convert yuan to other currencies, including the purchase of art and fine wines that are salable worldwide.

Regardless of how private capital leaves the mainland, the global financial services industry is taking notice. “We have seen a steady flow of money from China over the past few years, and this is obviously a large opportunity for wealth managers,” says Gerald Ferguson, general manager for Asia at RFi Group, a Sydney– based research firm specializing in banking and finance. “From our research we do see the majority of the outflows settling in Hong Kong, and to a lesser extent Singapore, which is mainly due to customers wishing to take advantage of the wider array of investment options available outside of China.”

When Chinese private investors do bring liquid assets directly to U.S. or European financial advisers, their accounts are often held offshore to avoid unwanted scrutiny. An executive with one major American asset manager says his firm prefers to hold Chinese private assets in Luxembourg-domiciled funds; several U.S. wire houses recently clamped down on advisers keeping domestic accounts for emerging-markets private clients, forcing those managers to reassign them offshore.

China’s elite prefer to spread their wealth across geographies and asset classes. “The volatility at the beginning of 2016 has underscored the need for investors in this region to have a fully diversified global portfolio,” says Jean-Claude Humair, regional market manager for UBS Wealth Management in Hong Kong.

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