Like many young Chinese people, Byron Zhang feels like he’s missed out. Real estate investing was the definite path to riches and stability for his parent’s generation. The idea of profiting from that boom has since fallen apart as prices drop, the population declines, and unsold and unfinished apartments pile up.
According to official data, household savings have risen to a record level. According to a February poll of 3,000 people conducted by Invesco Ltd., more than 90% of university-educated Chinese citizens between the ages of 22 and 32 say investing is an important component of their life plan.
Retail Transformation
The nation’s best-educated and highest-paid generation, the young Chinese, has transformed retail in China. They are now the greatest consumers of goods like cosmetics and vacation, and China Renaissance projects that by 2035, their spending would increase fourfold to 16 trillion yuan ($2.3 trillion).
By 2030, all Chinese households will have invested more than $18 trillion in the financial markets, according to Hans Fan, head of China financial research at brokerage CLSA Ltd.
- Household savings have risen to a record level.
- The young Chinese has transformed retail in China.
- 3.8 trillion yuan increase in fixed-term bank deposits was a major factor in the recent surge in family savings.
The benchmark Shanghai Composite gauge increased by as much as 425% from 2006 to late 2007 but lost more than two-thirds of those gains the following year. In 2015, the motif appeared once more. Despite being on a little lesser scale, the catastrophe nonetheless destroyed more than $5 trillion in worth.
One of them is Frank Dong, 42. He entered the stock market for the first time in 2015, at the height of the bubble. Then, in 2019, he decided to give the market one more shot.
Dong invested his money in a mutual fund that focused on the well-known Chinese white liquor baijiu rather than purchasing an investment property in Shenzhen. Now down 30%, the fund. He might have spent the extra money on the flat, which is up approximately 20%.
The worldwide investing sector may gain from the reluctance to pick stocks. Individual traders made up about 82% of all trades in 2018. According to China’s securities regulator, by 2022, that had decreased to about 60% following some severe market turbulence.
According to an analysis by the think tank China Finance 40 Forum, a 3.8 trillion yuan ($547 billion) increase in fixed-term bank deposits was a major factor in the recent surge in family savings. Despite the benchmark savings rate remaining unchanged for years, this is true.
