The Sorrow of Middle Class in China：No Other Choice than Buying Houses

Should I sold the houses that I have bought previously？ This is a question that upset great numbers of middle class in China. They may held at least 2 houses in hand：one for living and the other for investment. For a matter of fact， it is a common sense for most Chinese people who have obviously get rid of poverty and enjoyed enough free capital for reinvestment. However， from the view of the structural reform of supply front， this trend is far more harmful than thought.

Ms.Wang lives in Hanzhou city， earlier this year， she could have decided to sell the house she and her husband bought several years ago in the solar city of Hanzhou. Until the end of the widely focused G20 Summit， the house they hold turned out to gain 10，0000 yuan over night. Of course，Ms. Wang canceled her selling plan， but also afraid of the rumoring goes that the housing price bubble in Chinese housing market will soon burst out. Whereas at this time， she has no other better choice to make sure her investment profile could be more safe and profitable than keep her house in hand.

The high net worth group together with the middle income families in China are facing this housing price problem alike now. No matter how much investing properties they hold in hands， no matter they have had any housing properties or not， no matter they are in the high tier cities or not， this trouble troubled most Chinese people like an epidemic. Buying house seems to be the only way out for them to keep and add the value of their assets. They just cannot imagine how they might manage to fight against the high inflation rate other than investing in real estate market.

October 1st， Chinas currency， RMB has officially become the member of SDR basket. A day before this agreement took effect， the policy maker of Chinas central bank said that the revolution we are forcing now should not be carried without relating to ecomomic growth. Few years age， the hitting speculations in the market add to the value of RMB. The devaluation directed by the BOC is the correction for this mistake， and also showcases that China will do its best to keep up high pace with the other SDR basket members in this devaluation tide. However， this statement confused the investors so much that they all wondering if this means RMB will turn out to be on the track of long- lasting devaluation.

Actually they dont get the point that the investors in all walks can be motivated by the prospect of exchange rate devaluation to buy more houses to ensure the safety of their asset. Apparently， there is no other choice can be more trustworthy than real estate market in China. Other than that， the real estate market these days has caused great siphoning effect on both the budget and the profit of commercial organizations in China. Even if the citizens spending plan and family investment prospect has been forced into a disordered situation.

For this very reason， management became more and more difficult for the policy maker and the middle income families as well. For now and days to come， the macro-markets are mainly waiting for changes to come. At the same time， the worries about future from different sections of the market and different walks of life keep on enlarging. Among which the outstanding group should be the middle class， they seems to be deeply plagued by what theyve earned through hard working.

As a matter of face， the defining of“middle class” in China has aroused an actively-participated discussion from all walks of lives here. Experts suggest that whose yearly income between 60，000 to 120，000 yuan and hold some other properties like house and banking assets in China should be deemed as a mem- ber of “middle class”. According to this standard， the total population of middle class in China may be over 300，000，000. Some who have just reached this level snared this title and emphasize that far from owning a middle class lifestyle， they just be trapped by the government to be labeled as so. It is known to all that enlarging the middle income group is an significant part of the revolution strategy in China， who aims at doubling the income of domestic citizens that calls for more efforts to be made in further expanding the middle income team. When this dream comes true， the value preservation will be the top task to tackle in no doubt.

The pressing demand of the day is to change the management strategy the middle class utensil in investing and financing. In the past 10 years， the investors may still be active managers of their own assets， they are consented to take the risk of devaluation in order to gain high profit rate. Whereas in these days， the security of your assets counts much more than anything else when they are facing the cold winter for financial section. They should wait for the spring to come， and right now the cash rules. But someone would ask， can we catch opportunity through just waiting？ As we all know that devaluation always come with has nothing to deal with. To better the investment profile seems to be the only way out， but it is just a goal that cannot be easily fulfilled.

If the guiding book for middle class to safely pass the transition period really exist， it must be compacted as“professionalize， security， fluidity”. In an investing circumstances that a lot of players are under negative interest rate， the investing philosophy can be safe， safe and safe without doubt. Middle income investors will pay much more attention to housing price， gold price and exchange rate than any other investing items， since these can be regarded as the most solid asset profiles in Chinese market. Whereas， none of these three works really stable here in China. No matter the middle class or the high net worth stratum， even the policy makers are upset by this prices.

As a result， members of high net worth group cast their eyes to the more mature real estate market overseas. Australia， Canada and some western Europe countries have become the main target. Even if those who do not have enough current assets to buy real estate overseas will choose to purchase foreign exchange to diverse their asset profile or buy in some other fixed income financial products there.

High net worth group in china has paid much more attention to assets management than ever before. They may do the investing through enriching their own knowledge of financial section and may also employ the services provided by the financial institutions. Most of them will do the asset manage-ment in an two level structure， at the basic level they will buy some insurance in Hong Kong； at the second level they may turn to stock market for higher profit rate. Despite the rising participation rate in investment， Chinese investors oversea asset allocation accounted for less than 2% in the entire market. There are two main reasons that accounts for this scene， one is that oversea asset allocation are a brand new way for asset management in Chinese market， it is not widely known and are employed only by small groups of people. Secondly， Beijing government has not completely relaxing its strict control in this sector.

Looking around， the whole world has been caught into a vicious cycle of deteriorating. High debt ratio is no longer something strange to us. We use credit card and mortgage like crazy. Even the American bonds， German bonds and Japanese bonds， which are known as the gilt-edged securities has gone without their spells. In the old days， when the market was in its normal track， investors can buy these gilt-edged securities as the hedging strategy. Those bonds with high credit ranking would be deemed as the better choice to save the assets in hand. In the other side， the fluency of bonds is also outstanding in the stock market. Whenever the investor change their mind， they can easily pull out of the sector and bet on other choices without any complicated procession.

The fundamental problem lies in that the world economy has witness 5 successive year of lower rate growth since the latest financial crisis， the aver- age growth rate turn out to be much more lower than 3.7%. Moreover， this disappointing outlook will continue in 2017. Those who works in assets management field may often encounter this scene， their friends and relatives may ask them how to deal with their asset in this volatile market. To be frankly， there is not a guide that can suit all the investors， asset management in itself， badly depends on each persons own situations respectively. But this is indeed a golden rule for asset management at this stage， that is aim at something safe.

Despite the real estate investment， are there any other answers that could effectively maintain the value of your own asset？ Expert concluded that for the normal investors who actually do not know a lot about asset management， bonds and currency funds can always top their investing list for the lower risk. Also， find a professional consultant institution and pay for their special tailored services based on your own situation can be another effective way to gain more profit from asset management.