How to deal with inflation, I'm live in China.

[josesmith]

Hi guys,

I'm newbie in here, I need some advice on how to deal with inflation,currently I'm living in China,the country with highest rate of wealth inequality.

Currently I have around 500,000 RMB in my bank account,the deposit rate for one year is 0.3%. I earn the money through my hardworking in a trading company. Now I can't find any best way to invest, or even to fight the inflation.Therefore if I put the money in my saving account, I will lose the money in each year.

The stock market is the best place for investment, but it's not true in here. China stock market is the high risk market in the world, from statistic almost 90% of small stock holder were loosing money.

"China's stock market is now worst in world

Shanghai Composite has fallen 43 per cent since 2009 peak, evaporating US$748 billion in value" from Bloomberg in Shanghai."

What about the real estate?

Chinese government is still in processing to make the biggest real estate bubble in China. If you have 100,000RMB, you only can buy 50 square meters room. As one of young immigrate, I don't have any property in this city, thus I rent the apartment for living (small, but also expensive). From my point of view, put the money in real estate, I will loose the money, but also may pay the debt.Of course, if you have a property bought several years ago, then you don't need to work, you can make living with the fatest growing property price.

"China Has The Priciest Housing On The Planet, And There’s Nothing Beijing Can Do About It"

As a normal Chinese young man, I have to stay in this country. I'm living hard to make bread for myself and my family, but it seems goverment is sucking our blood and take away the money from us. For the high living price, we have to save every penny for living. In order to solve this problem, I'm really eager to find solution to solve this.

Is there anybody can give me any advice?

Sincerely

Jose Smith (My English name, I'm Chinese).

[bjl584]

Buy and hold still works. Don't focus on what the market has done in the past year or two.

If you are that concerned about the Chinese stock market, then you could always invest in America's market or in any other country's market that you choose.

[josesmith]

Buy and hold still works. Don't focus on what the market has done in the past year or two.

If you are that concerned about the Chinese stock market, then you could always invest in America's market or in any other country's market that you choose.

Hello Brian,

Thanks for your fast reply.

Do you mean I need to invest these money in either stock market or real estate, even the price is highest in the world ?

I do have a HSBC account in Hongkong, there is some US dollar in that account. It seems I have no idea how to invest money in US stock market.

Some financial specialist said: "Spending your money is best way to against inflation"
What's your opinion about this?

One more question, if you live in this country, what will you do on family financial?

[97guns]

i know the chinese are buying gold heavily, im reading they are slowly moving into silver. they love any kind of hard asset, they are snapping up real estate here in the states at a rapid pace.

im reading they are buying gold mines in africa to sugar farms in jamaica, they seem to be the ones with money at the moment.

[97guns]

sorry, kind of off on a tangent here but they just bought smithfield meats here in the usa too

http://money.cnn.com/2013/05/29/news/companies/smithfield-foods/index.html

they will be owning everything soon. back on topic, to fight inflation the chinese populous buys gold, they dont trust their gov't at all, you should be able to see it yourself at the jewelry stores.

[BuckyBadger]

I thought the Chinese government restricted what investments were allowed? It may not be possible to invest in the US stock market. I thought that's why China had all these "Ghost Cities;' because the people weren't allowed to invest their money anywhere else.

I could be wrong, though.

[josesmith]

i know the chinese are buying gold heavily, im reading they are slowly moving into silver. they love any kind of hard asset, they are snapping up real estate here in the states at a rapid pace.

im reading they are buying gold mines in africa to sugar farms in jamaica, they seem to be the ones with money at the moment.

Thanks for your reply.

China with the highest wealth inequality. Government with huge money reserve, but they are serving for rich people.
Whatever the government bought gold, silver or other resources, typically brings no benefit for poverty people.

What's more, there are no real social insurrance or welfare from government for the poverty family. If I loose the job may lead to lose everything. That's the reason I don't want to deposit the money into bank account, and want to find best place to invest with low risk.

[snafu]

I'm sorry to have more questions than answers. What are the rules for PRC's citizens to invest 'off shore?' Is it easy to hold savings at HSBC in HKK? Can you hold USD or RMB? Do HSBC agents sell American Mutual Funds? What are their commissions/fees, management exchange ratio? Have you/can you contact wwwVanguard.com to learn about their funds...particularly agent for Vanguard Index? In the west it's very popular to Dollar Cost Average [DCA]. We arrange to automatically have a set amount transfer from our bank account to our investment account to purchase a variable amount of mutual fund units. Over a period of many years in spite of stock gyrations the overall value exceeds the investment.

The over riding risk for you are changes in government, administration and rules/laws of off shore investing and accessibility when needed. What will Xi Jin Ping change?

Like you, I fear mainland's housing bubble at this point.

[josesmith]

I'm sorry to have more questions than answers. What are the rules for PRC's citizens to invest 'off shore?' Is it easy to hold savings at HSBC in HKK? Can you hold USD or RMB? Do HSBC agents sell American Mutual Funds? What are their commissions/fees, management exchange ratio? Have you/can you contact wwwVanguard.com to learn about their funds...particularly agent for Vanguard Index? In the west it's very popular to Dollar Cost Average [DCA]. We arrange to automatically have a set amount transfer from our bank account to our investment account to purchase a variable amount of mutual fund units. Over a period of many years in spite of stock gyrations the overall value exceeds the investment.

The over riding risk for you are changes in government, administration and rules/laws of off shore investing and accessibility when needed. What will Xi Jin Ping change?

Like you, I fear mainland's housing bubble at this point.

Many thanks for your interesting thoughts. It seems there is no simple therapy for my problem, I need to dig more information for the investment. As a normal people, I can not answer your question too.

By the way, I'm looking for the best way to invest in domestic, with reason of I'm living in China, a native Chinese man.

Lastly, what we can learn from the past history of Japanese property bubble collapse?

[snafu]

1st, terrific English writing skills, did you study abroad?

As you know, the Shanghai Exchange doesn't follow established international accounting procedures impossible for the average investor. The largest N American investment firms can't make a profit in China either...their loss is just the cost of doing business. They are permitted to operate out of necessity to transfer currencies and move funds out of the country for the priviledged to profit.

The 4 major banks are government owned and their policies, preferences and mandate are not required to follow accounting principles. The smaller banks likewise carry an enormous level of debt and non performing loans so only careful manipulation keep the doors open.

At present you pay very modest sums in taxes, food transportation and traditional accommodation when compared to other countries. It's important to carefully consider any un-necessary spending and save as much as possible. Protecting savings in HKK HSBC is important because the Yuan is very under valued against other international currencies. The government is moving it up in teeny increments. Should there be a change in policies, you will be in a position to benefit. Alternatively, you will have enough saving to provide a modest retirement 30 years in the future.

[J.Apple902]

Jose. Sorry I cannot answer your question but would like to contribute to the discussion about China's role in the global financial market. Yes China has a massive wealth inequality, and sure the government is part of the issue. The govt, in buying commodities, is being proactive about a potential departure from USD being the global currency. Inflation only exists bc the federal reserves (which are all privatized worldwide) has released more $$ than there actually should be. This effectively creates a worldwide cash bubble. High inflation, seen in China today, has led to hyperinflation in countless examples of other national situations in history. If all you are left with is a currency when this happens, you have lost your investment.

I say the government is only part of the problem bc it the the privatized federal reserves which truly control everything. How can it be that the reserve systems control country loans and country interest rates, however the citizens cannot vote on these matters? How can it be that the same guys controlling the reserves also have stake in the banking and oil and commodities sector, along with weapons and drugs. How can it be that we are witnessing WW3 in the middle east (Afghanistan, Iraq, Libya, Egypt, Syria, etc), and again it is the big business privatized sector that wins massively (investing in both sides). We live in a scary world, and yes I do not have great answers for you, but your mind is in the right place being concerned. Do your best to hold on to your hard earned money, because today we live in a world where "the man" wants to take everything from the non-0.01%. Examine the Rothschild empire, and you will find truth in these examples. Good luck.

[jIM_Ohio]

Here are several investing techniques to hedge inflation


1) Borrow money and earn higher on the money than the bank charges in interest
2) Invest in commodities like gold and precious metals
3) Invest in Real Estate
4) Invest in dividend paying US stocks (large cap), as the growth of dividends in the S&P 500 has surpassed inflation historically.

If you did all 4, you would be diversified. Any one or two combined should help. Do you plan to retire in China?