As Chinese scramble to save money, ‘everyone realises winter has come’, and they’re trying to get out of the cold
- Gone are the days when the property and stock markets yielded guaranteed gains in China, leading to middle-class investors becoming more risk-averse with wealth
- The search for moneymaking investments has prompted a global-trend-bucking gold rush in China, and banks say low-yield, low-risk term deposits are on the rise
After carefully reviewing the interest rates that several banks were offering for lump-sum term deposits, Li Yuan put 200,000 yuan (US$27,800) in a small local institution, ensuring that her hard-earned savings would see an annual return of 3.2 per cent for three years.
This marked the second year she has done so. And her carefully weighed investment decisions are being made as traditional means of investment in China have largely fallen by the wayside on the nation’s road to a stable economic recovery in uncertain times.
“I started planning to save for my son last year,” said the mother of a toddler in the northern province of Hebei. “There’s no big reward in bank deposits, but at least they’re predictable.
“The real estate market is bad, and so is the stock market. Even wealth-management products can’t guarantee a positive return.”
Li, who owns a small business and considers herself fortunate that it survived the pandemic, is among the millions of members of China’s middle class who have been left scratching their heads as they search for moneymaking investments that don’t come with outsized risk.
The housing and stock markets – two of the most common means in which Chinese people built up their wealth in the past – no longer offer the same level of security.