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Wealthy Chinese investors have faced shrinking investment opportunities amid challenges in the real estate and equity markets.
How reported Bloomberg Chinese investors are moving away from traditional patterns of investing money, but are not yet able to decide on alternative investment opportunities.
Everything is falling, money is burning…
Traditionally, wealthy Chinese have invested money in the stock market, which brought them good returns. Now, however, as Wei He, senior economist at Gavekal Research Ltd in Beijing, comments:
“It doesn’t matter how high the net worth of your assets is. The golden days of just parking your money and letting it grow yourself are gone.”
It wasn’t just the stock market that failed. Problems are also observed in a number of leading developers in the real estate sector. House prices have been falling since the 3rd quarter of 2021, which further increases investors’ distrust of this segment.
Meanwhile, mutual funds have also suffered the fate of other investment options in China’s bear market.
As a result, the only alternative for many investors was savings deposits in banks, although the interest rate on them is very low.
“All I can do this year is just put my money in a big bank. It doesn’t matter at what percentage, at least it will be safe,” one frustrated investor complained.
Indeed, investors in China are forced to opt for bank vaults, choosing security at the expense of profits. This is due to the fact that the economy of the Celestial Empire is still feeling the effects of the coronavirus epidemic and the fall in stock prices of technology companies.
No sooner had the tech sector recovered from losses of over a trillion dollars than the crisis of the infamous developer Evergrande dealt another blow to the national real estate market.
Will cryptocurrencies help?
In the face of falling confidence in traditional markets, investors may well turn to alternative options for investing money. One of them, of course, is cryptocurrencies. However, the problem is that last year the Chinese authorities not only came out in a resonant crusade against miners, but also outlawed digital currencies as a whole.
At the moment, the storage and sale of cryptocurrencies are prohibited in the Middle Kingdom, and the use of digital tokens in financial transactions has been described by the Supreme Court as “illegal fundraising.” As a result, in 2021, there was a mass exodus of both local and foreign crypto platforms from the country.
See also Where they do not like cryptocurrency – the top of the most unfriendly countries
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