oneoldude

Investing in China's Next Boom

Chinese provincial farmers are among the most conservative persons on planet earth. Their savings rate is extraordinarly high, and with good reason, given the scarcity and expense of health care and the lack of a social safety net for retirement.

To presume that provincial farmers, en masse, will simply sell their only source of income to take a chance in the big cities and to presume that they will completely change their thousand year old traditions in an instant is a presumption that is hard to swallow. Even harder to swallow is that even if they did sell their only income source, that they would go on a spending spree that is completely a-typical for that group of people.

If you had said that, over time, as the provincial farmers die off that their property would be sold and the proceeds passed on to their children (if that is even possible in China) and that their city dwelling children would go on a spending spree, then that is a reasonable supposition. But that will take time, a lot of time. And with the RE market crashing in China, I suspect that the boom you describe will perhaps begin to occur some time in the future, but not right now. Timing will be the thing.