Top 20% in China are climbing toward US wealth average

[Mista]

That's the research job done by the concerning research institutes, 4.5 million is really nothing considering your house alone can be worth much more than that in first tier cities. If you have any questions, inquire the research agencies listed on OP post.

Like I said, owning an apartment doesn't mean the mortgage loan is fully paid.

You believe the net asset to gross asset percentage is 95%? Only 5% are liabilities?

 

[Han Patriot]

So do you still think the top 20% of households have an average of RMB 4.5 million of net assets?

Mista, you cannot apply the Singaporean logic here. Trust me. They are rich...especially this 20%. Downpayment for houses is typically 40%. In SG, you only pay 10%?

 

[Mista]

Mista, you cannot apply the Singaporean logic here. Trust me. They are rich...especially this 20%. Downpayment for houses is typically 40%. In SG, you only pay 10%?

Simple logic tells me that just this top 20% should have similar value of total net assets as the entire US if the report is true, which is obviously untrue. Look at post #8.

 

[beijingwalker]

Like I said, owning an apartment doesn't mean the mortgage loan is fully paid.

Those 20% must have paid fully the houses they own and Beijing also has vast number of government civil servants whose houses are provided by the government or were bought at a much discounted price, they can resell them and made a fortune. Many used to be dirt poor Beijing locals made a fortune from the government compensation for using their houses for development, I have a friend live outside the 5th ring road, 北安河，her family used to be farmers and she used to borrow money from us all the time, but overnight because of 拆迁, the government compensate her with 3 new apartments and millions of RMB, her wealth now can be worth over 10 million RMB, way above US average, many Beijing locals like her move from poverty to multi millionaires in one day. Things just change so fast in China.

 

[Mista]

Those 20% must have paid fully the houses they own and Beijing also has vast number of government civil servants whose houses are provided by the government or were bought at a much discounted price, they can resell them and made a fortune. Many used to be dirt poor Beijing locals made a fortune from the government compensation for using their houses for development, I have a friend live outside the 5th ring road, 北安河，her family used to be farmers and she used to borrow money from us all the time, but overnight because of 拆迁, the government compensate her with 3 new apartments and millions of RMB, her wealth now can be worth over 10 million RMB, way above US average, many Beijing locals like her move from poverty to multi millionaires in one day. Things just change so fast in China.

Yeah, certainly there are many such cases. But numerous enough to make up the top 20%?

There are 450 million households in China. Top 20% = 90 million.

Top 20% own 90m x $657k = $59 trillion of NET assets.
Combined GROSS property value of every Chinese household: $42.7 trillion. Almost 4x of GDP.

Does the figures even make sense to you?

 

[beijingwalker]

Yeah, certainly there are many such cases. But numerous enough to make up the top 20%?

There are 450 million households in China. Top 20% = 90 million.

Top 20% own 90m x $657k = $59 trillion of NET assets.
Combined GROSS property value of every Chinese household: $42.7 trillion. Almost 4x of GDP.

Does the figures even make sense to you?

However you do your math, that's the hard fact in China, that's why I always say Chinese economy is different from other countries, hundreds of millions of Chinese travel overseas every year and buy up most of the world luxury goods, one can never tell how much wealth people really have in China but from all signs one can tell that it must be tremendous.

 

[Han Patriot]

How true is that? 20% of the population of China is almost equivalent to US's population. With equal average wealth, this means that just the top 20% of China has a total wealth equal to the US.

2017 Total Wealth by country from Credit Suisse:

United States Total wealth:
93.6 trillion USD

China Total wealth :
29.0 trillion USD

http://www.finplanvzw.be/assets/media/documents/Credit Suisse Global Wealth Report 2017.pdf
Page 48 & 50

Reread the article. Does it mean top 20% interms of population or wealth?

 

[Mista]

However you do your math, that's the hard fact in China, that's why I always say Chinese economy is different from other countries, hundreds of millions of Chinese travel overseas every year and buy up most of the world luxury goods, one can never tell how much wealth people really have in China but from all signs one can tell that it must be tremendous.

Well, try doing your sums and see whether it makes sense. $59 trillion is 3/4 of the world's GDP.

Reread the article. Does it mean top 20% interms of population or wealth?

Top 20% households by net assets.

 

[beijingwalker]

Well, try doing your sums and see whether it makes sense. $59 trillion is 3/4 of the world's GDP.

GDP is just for one year, household wealth is built up over time and also depends on how much you spend, even you make one million a year but if you spend 999,000, this one million doesn't contribute much to your personal wealth, that's why sometime PPP makes more sense.

In PPP , China is far ahead of US, so that 20% is an understatement, many US families can save no money at all, average Americans owe much more money than average Chinese do , we don't have a tradition to live a good life on borrowed money.

Survey: 69% Of Americans Have Less Than $1,000 In Savings
https://www.forbes.com/sites/niallm...han-1000-in-savings-infographic/#6dc2d93c1ae6

 

[Mista]

Yeah, certainly there are many such cases. But numerous enough to make up the top 20%?

There are 450 million households in China. Top 20% = 90 million.

Top 20% own 90m x $657k = $59 trillion of NET assets.
Combined GROSS property value of every Chinese household: $42.7 trillion. Almost 4x of GDP.

Does the figures even make sense to you?

GDP is just for one year, household wealth is built up over time and also depends on how much you spend, even you make one million a year but if you spend 999,000, this one million doesn't contribute much to your personal wealth, that's why sometime PPP makes more sense.

In PPP , China is far ahead of US, so that 20% is an understatement, many US families can save no money at all, average Americans owe much more money than average Chinese do , we don't have a tradition to live a good life on borrowed money.

Dude, wealth is obviously in nominal terms.
Anyway never mind the US or the rest of the world, let's use China's own domestic statistics.

According to the article, top 20% of households own $59 trillion of NET assets.
(20% x 450m households x $657K)

Combined GROSS property value of every Chinese household in 2017: $42.7 trillion.
https://gbtimes.com/china-tops-world-gross-real-estate-value

77.7% of gross assets are in property, which means that total gross assets of China is roughly $42.7 trillion/77.7% = $55 trillion.

https://finance.sina.com.cn/china/gncj/2019-01-20/doc-ihrfqziz9287417.shtml

So how is it possible that the top 20% of households own $59 trillion of NET assets while the total GROSS assets is approximately only around $54 trillion?

 

[Han Patriot]

Well, try doing your sums and see whether it makes sense. $59 trillion is 3/4 of the world's GDP.



Top 20% households by net assets.

What do you understand from this statement:

Chinese households in the top 20% in terms of total assets

Does it mean top 20% of the population? Or does it mean households holding 20% of the wealth?

 

[Mista]

What do you understand from this statement:


Does it mean top 20% of the population? Or does it mean households holding 20% of the wealth?

Obviously it's the top 20% of households.

What is 'households holding 20% of the wealth' even supposed to mean? It's just 20%, no top no bottom whatever.

families in China belonging to the top 20% have average net assets of 4.456 million yuan

 

[Han Patriot]

Obviously it's the top 20% of households.

What is 'households holding 20% of the wealth' even supposed to mean? It's just 20%, no top no bottom whatever.

Assuming the gdp is 12 trillion, 20% of 12 trillion is 2.4 trillion, the people holding 2.4 trillion in wealth equals 2.4tril/205000(1.4mil yuan/6.8) average asset = 11.7mil households = assuming one household is 4 ppl = 11.7 x 4 = 46million people. It is completely reasonable to have 46mil ppl living american standards.

 

[beijingwalker]

Obviously it's the top 20% of households.

What is 'households holding 20% of the wealth' even supposed to mean? It's just 20%, no top no bottom whatever.

The OP research results are from professionals in the related research area, I guess you can get a better explanation from them than argue with me, I just posted a research report and have no time to go through and check all those data, numbers and figures you provided, try to consult professionals, your personal research can be wrong by comparing different things.

 

[Mista]

Assuming the gdp is 12 trillion, 20% of 12 trillion is 2.4 trillion, the people holding 2.4 trillion in wealth equals 2.4tril/205000 average income = 11.7mil households = assuing one household is 4 ppl = 11.7 x 4 = 46million people.

What? GDP and wealth are two different measures.

The OP research results are from professionals in the related research area, I guess you can get a better explanation from them than argue with me

Well, that's the purpose of creating a thread isn't it? For discussions and argument.

Or do you not want to hear alternative arguments, because your whole purpose of creating a thread is to 'feel good'?

I just posted a research report and have no time to go through and check all those data, numbers and figures you provided, try to consult professionals

You serious? By your logic, no thread should even be created because we need to 'consult professionals' to make a reply in this forum. You start a thread and you don't have your own independent thoughts on it? You take everything in face value?