It found that Chinese median wealth per adult, at $26,752, now outstrips Europe, where the average adult has a wealth of $26,690. The European figure takes into account the whole of the continent, which includes many less wealthy nations in its southern and eastern regions.
That’s right, China per capita wealth outpaced European per capita wealth last year by a whopping $62.
In China, owning a home is synonymous with “security for retirement,” says Iris Pang, chief China economist at Dutch bank ING. And for years, real estate was a reliable investment strategy. Home prices in China have skyrocketed in the past two decades.
Unfortunately, real estate prices—particularly residential real estate prices—are falling rather precipitously, after softening for several years now.
That $62 per capita wealth margin China presumably enjoyed over Europe in 2021 amounts to 0.23% of China’s per capita wealth. It amounts to 0.33% of the 70% portion of that wealth presumably tied up in real estate.
Real estate prices in China declined 1.3% year on year in August alone. Which means market valuations on real estate have dropped by 1.3% in August alone. Which means China’s housing/banking/economic crisis has already erased whatever wealth advantage China might have accrued over Europe last year.
But instead of factoring current economic data, corporate media simply trotted out stale numbers and said “the average Chinese is wealthier than the average European”.
Perhaps that was true last year. It is highly unlikely to still be true today.
Not to mention that most of these "homes" are apartments in huge, shoddily constructed urban buildings. Throw in Chinese demographics and I don't see how they could possibly be a good store of value.
Not to mention that most of these "homes" are apartments in huge, shoddily constructed urban buildings. Throw in Chinese demographics and I don't see how they could possibly be a good store of value.