Stocks or real estate for China's middle class?

Discussion in 'Economics' started by K.C., Aug 17, 2005.

  1. K.C.


    Stocks or real estate for China's middle class?
    By Min Xu

    China is one of the most savings-oriented nations in the world: total personal savings deposits amount to over 12 trillion yuan (US$1.48 trillion), or around 50% of income. For thousands of years people have been accustomed to putting money under the mattress, and the intermediating role of a banking system has been well suited to the traditional, conservative mentality of saving at a risk-free rate for the future. This mentality, however, is rapidly changing.

    The low savings deposit rates - the one-year deposit rate is now 2.25% and the five-year rate is 3.60% - give those who are profit-oriented an incentive to explore alternative investment channels. In addition, a middle class growing in affluence has emerged over recent years, especially in rapidly developing coastal cities. It is estimated that 66% of all savings deposits are controlled by only 10% of domestic depositors. These higher net-worth individuals espouse the same consumerism pervasive in more developed countries, and are avid endorsers of Deng Xiaoping's famous expression "to be rich is glorious". They aspire to the best cell phones, luxury brand clothing and accessories, automobiles, and high-end homes. They are no longer satisfied with collecting paltry interest on their bank savings and are hungry for positive real returns on their assets.
  2. EBenson


    my guess would be : RE in the big coastal cities,generally the same savings picture as in S Korea and Japan.
    Seems east asians like to put money aside,guess it lies in their social/family culture.
    Ive got the impression that chinese in NYC like gold/jewelry idea if its the same in mainland china...