SINGAPORE – For years, the Harvard College China Forum brought business moguls en masse to the university’s oak-panelled rooms, including Alibaba co-founder Jack Ma, Xiaomi’s Mr Lei Jun, Blackstone’s Mr Stephen Schwarzman and Bridgewater Associates’ Mr Ray Dalio.

There at the invitation of students, some of whom also happen to be the children of Chinese billionaires, the moneyed classes of the world’s two largest economies would hobnob every year in a lively exchange of ideas, demonstrating wealth’s power to bridge geopolitical rifts. 

Such scenes are now fewer and far between.

United States-China tensions are so fraught, even the world’s richest are struggling to bring the two sides together.

Only a handful of executives from mainland China came in person to this year’s China Forum in Cambridge, Massachusetts. As for the elite students who lifted the profile of the China Forum in the past, many are gravitating home.

Ms Zhang, one recent summit organiser, is the daughter of the founder of one of China’s largest retailers. The 25-year-old, who asked not to be identified by her full name due to privacy concerns, grew up in the Bay Area with her mother while her father stayed behind in Beijing.

Ms Zhang’s childhood straddled two cultures, thanks to this “astronaut” family arrangement that is modus operandi for China’s ultra wealthy.

She speaks with a Californian accent, rowed crew at Harvard, and is proficient in Spanish.

But in 2020, she decided to hit a pause on her US journey.

Ms Zhang is not alone. She is part of a growing wave of Chinese youth returning to the mainland and eschewing what used to be coveted overseas jobs and foreign citizenship.

And while China is facing the world’s biggest exodus of millionaires and growing capital outflows, rising geopolitical tensions and the perception of increasing hostility abroad towards Chinese nationals are changing the calculus.

In 2022, the number of overseas Chinese graduates who repatriated rose 8.6 per cent from a year ago, according to the Human Resources and Social Security Information Network.

While the number of Chinese studying abroad has risen, more also now choose to flock home. The ratio of returnees to those who enrol at overseas universities increased from 23 per cent at the turn of the century to 82 per cent in 2019 – when more than 580,000 overseas Chinese students repatriated.

Born during the heyday of US-China relations with globalisation firmly ascendant, China’s Generation Z is now coming of age in a very different, protectionist world. 

Manufacturers are shifting production away from China; the US and its allies are restricting China’s access to its cutting-edge semiconductors; Beijing is tightening the flow of information; and potential accusations of technology theft hound Chinese executives and academics alike in the US.

The decoupling of the world’s two biggest economies is upending the lives of China’s most ambitious students, who now face rejected visa applications abroad and growing youth unemployment at home. 

The country’s most privileged and cosmopolitan youths are shielded from much of the economic fallout and have far more options at hand, thanks to their wealth and family connections.

Still, many are choosing to throw in their lots with Beijing for now – even though some hold green cards or have backup plans for immigration.

The safety nets and economic resources available to them mean they are willing to stomach reverse culture shock and deal with the persistent risk of sudden crackdowns on the affluent.

“Gen Zs understand the difficulty of being in China, but they feel like there’s more opportunity if they were to try to grow their business in Asia,” said Mr Marshall Jen, principal adviser at family business advisory G. Li & Co.

Mr Jen, who also comes from wealth – his father owns one of the largest international school operators in China – now mentors other second-generation clients. “They wouldn’t want to go to Europe or North America either.”

Stay humble, stay quiet

The children of wealth form a tiny circle of one-percenters that includes the likes of Ms Alice Ho, youngest child of the late billionaire casino owner Stanley Ho, and Mr Marco Ren, son of a Chongqing-based real estate mogul.

Labelled fuerdai, or second-generation rich, by the media, the scions of the rich attended the world’s top schools, moving fluidly between communist China and the intellectual cradle of the West, accruing the social capital that remains elusive to their parents.

Ms Ho now lives in Beijing, her first time living on the mainland after a childhood in Hong Kong, boarding school in Britain and higher education at the Massachusetts Institute of Technology. 

In choosing life in China, many of the rich in their 20s face minute scrutiny in a precarious world.

Beijing is tightening its grip on wealth as inequalities widen and China’s much-vaunted social mobility loses steam.

Images on social media of fuerdai burning money, buying Apple Watches for pets and crashing Ferraris have added to simmering resentment and Chinese netizens stand ready to flag any sign of bad behaviour or disloyalty, which could have serious repercussions for the families of well-to-do Gen Zs.

The mantra now is “stay humble, stay quiet”, said Mr Jen, the family business adviser. And while money and privilege continue to open doors in a society that emphasises guanxi, or connections, it is now increasingly imperative to keep signs of privilege hidden or prove that it is being channelled for the greater good.

There are exceptions: 24-year-old Marco Ren’s father, the real estate tycoon, circulated on Weibo in March after he spent 10 million yuan (S$1.9 million) buying a company that provided basketball training for his son after the previous owner ran into liquidity issues.

“That was blown out of proportion,” Mr Ren said. “Truth is, I don’t feel like a fuerdai.”

Still, most of the super rich are wary of association with conspicuous consumption and cautious about political activism.

China’s gravitational pull

Mr Ren changed his mind about staying in Australia after the Covid-19 pandemic. With few other Chinese faces in his department at Macquarie University in the suburbs of Sydney, he felt lonely and cut off from the bustling city life he was used to.  

When the university told all international students to leave in 2020, he spent more than a year taking online classes from his home in China, nursing the sense of being cheated of his education.

When he graduated in January 2023, he felt little attachment to Australia.

By choosing China, Gen Z scions like Ms Zhang are tempering a pickup in the exodus of money from the world’s second-largest economy.

Chinese tycoons who built some of the world’s biggest enterprises as the nation opened up to capitalism in the 1970s are sitting on almost US$1.1 trillion (S$1.5 trillion) of cumulative wealth that their heirs will likely control in the future.

The majority of these heirs are interested in entrepreneurship in China or in investing via family offices in Singapore and Hong Kong, rather than in the West, according to Mr Jen.

Their choices have graver consequences, however.

The repatriation of these hyper-connected individuals deprives the US and its allies of intimate knowledge about the inner workings of the world’s second-largest economy.

The deterioration in understanding runs both ways: Polls show younger Chinese have a more negative image of America than their parents, with the telling exception of those who have studied in the US.

On campuses across America, opportunities to build goodwill and mutual trust during late-night dorm room discussions and dining hall conversations are dwindling.

Although the US remains the top pick for Chinese students seeking to study abroad, the number of students enrolled in the US was down 29 per cent in January 2023 compared with the same month in 2020.

About two-fifths of Chinese seeking graduate education abroad now favour a country that is friendlier towards China, according to a May report from New Oriental Education and Technology Group.

It is unfortunate for both countries that fewer Chinese students are now studying in the US, said The New China Playbook author Jin Keyu, who herself is a Chinese-born, Harvard-educated professor at the London School of Economics.

“It’s a glue between the two nations, and it represents exactly the kind of engagement the two nations should do their utmost to protect.” BLOOMBERG