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guitarman001

China Post From Investment Forum

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Got this from an investment forum, thought it was vaguely relevant - make of it what you will.

Very interesting. I live in China and the overwhelming majority of investment at the moment is in property. The bubble has reached spectacular proportions. My previous apartment went up 800% in 8 years and the current one has gone up 100% in 2 years.

Renminbi bank savings rates are abysmally low at 0.36% for a savings account, raising to about 3% for a fixed term bond for 5 years.

I speak to a lot of middle class Chinese about what they are investing in and the answer is always property. I haven't met a single person in 4 years investing in gold.....and yet this article shows the increase in demand in the last year.

The Chinese government has just started introducing property taxes in Shanghai and Chongqing in an attempt to cool the property bubble. Shenzhen is up next. The situation is crazy as the investment apartments are rarely rented, as a second-hand apartment is worth less than one that hasn't been lived in. So the major cities have billions of RMB worth of empty apartments just sitting there waiting for capital gains.

If the government succeed in cooling the property bubble, and investors are looking for another home for their money then where is all this money going to go?

Quite probably into gold. As I said, everyone I talk to is still into property, but perhaps with the new taxes the tide will turn.

If this happens, the Chinese demand for gold is going to go of the scale, and it hasn't even started yet!

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"where is all this money going to go?"

What money ? There is no money, just countless numbers of empty properties with yet-to-be-realised-profits which will be impossible to sell.

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Certainly not from me!!

I was shocked at the rise in house prices. The topic WAS about gold investment so no surprise (to me) about the mention of gold - sorry if you thought this was a ramp!

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Certainly not from me!!

I was shocked at the rise in house prices. The topic WAS about gold investment so no surprise (to me) about the mention of gold - sorry if you thought this was a ramp!

Maybe it is maybe it isn't. I just thought it a bit strange how it suddenly jumped from Chinese property to gold. But I suppose the face that it was a gold forum explains that.

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