Wealthy Chinese Need More Investment Channels
    2010-10-04 10:53:25     CRIENGLISH.com      Web Editor: Xu Leiying
 
The latest report on high net-worth individuals as defined as those with investable assets of at least one million U.S. dollars was recently issued by Merrill Lynch Global Wealth Management and consultancy firm Capgemini.

The report indicates that the amount of assets of China's high net-worth individuals skyrocketed 40.4 percent, remaining the second largest in the Asia-Pacific region. In addition, their investments in real estate jumped to 27 percent in 2009 from 18 percent in 2008, ranking them first in the region.

A commentary in "People's Daily" argues that with the growing number of millionaires, private investors in China have found a limited number of investment channels. This is why they are trying to earn money from speculative investments in commodities such as in mung beans and ginger as well as real estate.

But the commentary notes that in sharp contrast to the huge gains from real estate investment is the increasing pressure of inflation. This is why the property market seems to be a better choice for potentially promising returns for wealthy investors.

The commentary also notes that as China's housing market offers potentially enormous fortunes for wealthy investors, average income earners may have to spend a lifetime paying off their mortgages.

The commentary argues the report's findings should serve as a reminder to policy makers that the property market must be controlled before it continues to widen the gap between the country's rich and poor. It says private investors should be given more incentives to invest in the real economy and help push China's economic development to a more productive stage.
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