From Bloomberg, March 16, 2024:
- Young people look to gold for adornments and investments
- Gold sales soar as Chinese seek alternative for nest eggs
With China’s deflation at its worst in 15 years, a volatile stock market and bank interest rates too low for her liking, 18-year-old Tina Hong is placing her financial security in gold beans.
Weighing as little as one gram, the beans — and other forms of gold jewelry — are increasingly viewed as the safest investment bet for young Chinese in an era of economic uncertainty. It’s part of a larger consumer trend for all things gold — from bullion to beans and bracelets — that has gripped the mainland.
“It’s basically impossible to lose money from buying gold,” reasoned Hong, a college freshman studying computer science in Fujian province who in January began buying gold beans because of their relatively low cost of about 600 yuan ($83) per gram. She has more than two grams of the beans and will continue buying them as long as costs are lower than international gold prices, she said.
Branded as an investment entry point for young consumers, the beans, which come in glass jars, are the latest hot-selling items in Chinese jewelry stores. Generation Z consumers — buffeted by high youth unemployment and the nation’s slide into deflation — are now among the top consumers of gold accessories in the world’s second-largest economy, according to the 2023 China Jewelry Consumer Trends Report by Chow Tai Fook Jewelery Group Ltd. The attraction of gold comes as people pull back on shopping amid months of disappointing growth.
China Gold Rush
A lack of faith in traditional investments has fueled this new China gold rush.The nation’s stock market has seen declines after reopening from the pandemic, with one of its key benchmarks dropping to levels last seen in 2018. The country’s middle class is bearing the brunt of a property downturn — while the central bank has lowered a key interest rate four times since December 2021, eating into the return on wealth management products....
....MUCH MORE
Fifteen years ago Chinese Gen X and millennials were saying “It’s basically impossible to lose money from buying apartments.”
The 2008 Beijing Olympics and the next half-decade were probably the high-water mark for the national mood, nothing was impossible. Then in November 2012 Xi Jinping took over as General Secretary of the Chinese Communist Party from Hu Jintao, the government, central bank and the Party goosed the economy by way of construction for the next seven years but it was all a debt-fueled mirage.
Over the years I've mentioned my thinking on China had changed sometime in the mid-twenty-teens:
In 1980 China's GDP per capita was $312.
In 2017 China's GDP per capita was $8,836 with purchasing power parity being $17,015.
The world has never seen anything like it.
2021
....I had a similar road to Damascus moment, though later, maybe 2015, 2016.
In 2012 I was still pro-China and immensely pro Deng :
Deng Xiaoping Smiles: Peoples Daily Online is Doing an IPO
Peoples Daily Online is the website of the flagship newspaper of the Communist Party of China.
Deng Xiaoping helped lift 1,000,000,000 Chinese out of subsistence poverty* with his pragmatic market reforms:
*Real GDP per Capita 1980-2009 (2010: $7,600):
1980 $ 531.41
2009 $6,309.15But Xi? He's a whole different kind of cat . I keep waiting for him to pull a Hitler line out of his pocket:
