Are Bitcoins Replacing China’s Walnuts?
“The saving man becomes the free man.”
-Ancient Chinese Proverb
Mostly extracts with links…but hey this is a blog not a publication… but here it is in a nutshell (lol) Chinese have limited options for investing. Mother China has indicated (so far) that they will not be regulating Bitcoin… has allowed BTCChina the largest bitcoin exchange to exist and state run TV had a number of documentaries on Bitcoin. Other investment schemes are indeed looking like schemes. Could Bitcoin be replacing some of the limited investment options the Chinese people have had (I hate using those two words in a sentence)so far? Probably. Could the government be encouraging this because it could help cool inflation in China? Possibly.
China’s Ghost Cities and Malls
Youtube Video via SBS Dateline Australia
“The problem is Chinese people have very few investment vehicles. They’ve lost trust in the stock market so they turn to real estate,” says Xu Si Tao, China Director of the Economist Intelligence Unit.
via CNN China’s crazy property bubble; November 7, 2013
“At present, bank deposits account for over 70% of the people’s financial assets,” says Sun. “Therefore, under circumstances where the interest rate is falling, the securities market has gone bust, the foreign exchange market is controlled and the bond market is under-developed, it is simply natural to choose real estate as the way to invest.”
via China’s Overheated Real Estate Market and Its Impact on Financial Stability
Some Chinese, mostly officials and people with ties to the communist party, have made a lot of money in recent years, but with China’s economy slowing, a shaky real estate market, and many businesses closing down, they are unsure where to invest their money.
The Chinese stock market has fallen nearly 40 percent over the past three years, and there are limited options for overseas investment. Traditional investments in stocks and real estate has only brought small profits, and sometimes even losses.
With few investment options, the so-called “cultural plaything” market has quietly sprung up, and some people spend thousands of dollars on carved walnuts.
“some people spend thousands of dollars on carved walnuts.”
via Epoch Times: Why China’s Rich Invest in Carved Walnuts and Other Bizarre China News; September 19, 2013
In China you can find counterfeit Walnuts. Bitcoin still counterfeit proof.
No Confidence in China Markets Inflates Housing Bubble
Matthew Zhou and his wife spent 1.6 million yuan ($261,000) to buy a two-bedroom apartment last month in eastern Shanghai after seeing no potential for long-term returns in China’s financial markets.
“Home prices keep rising, so I’d rather buy a place now than put the money in the stock market,”
via Bloomberg News — September 16, 2013
Chinese citizens allowed to invest overseas on trial basis (January 2011)
Wenzhou City, east China’s Zhejiang Province, has launched a scheme under which individuals will be allowed to invest overseas on a trial basis to encourage capital outflows amid high inflation and rising foreign exchange reserves.
via People’s Daily Online January 11, 2011
Brief History of Real Estate Ownership Controls in China
“Under the 1982 Constitution, urban land in China is owned by the State and the collectives own the rural land. Since the local and central governments administer the rural collectives, it can be construed that all land ownership is under control of the State. However, the Constitution’s Amendment Act of 1988 to Article 10 adopted on April 12, 1988, states that a land use right may be transferred in accordance to law. Based on this statement, a land use right becomes divisible from land ownership, thus making land use right likely to be privatized. Individuals,including foreigners can hold long-term leases for land use. They can also own buildings, apartments, and other structures on land, as well as own personal property.”
via China Window, China Real Estate Market — Laws and Regulations Concerning Land and Real Estate by Xiannian Ye
Additional Research:
Ferrebeekeper: The Chinese Walnut Bubble October, 2012
