China’s middle classes are investing an increasing proportion of their wealth into fixed assets such as real estate, reducing the amount they have for general consumption, wrote Yang Zeyu, a staff commentator with
Hsw.cn, Shaanxi Province’s largest news portal.
The Chinese government is pushing for a "consumption upgrade," a prospect that appears somewhat uncertain with a middle class that has a decreasing amount of ready money to spend, Yang said. He cited a report by the Boston Consulting Group as showing that 40 percent of China’s personal wealth in 2016 has gone into real estate. Last year, fixed asset investments took over financial investment to become the largest source of personal wealth for China's middle class, Yang said.
Meanwhile, despite increasing income levels, a shrinking number of urban residents identify themselves as middle class due to growing sense of insecurity over their financial prospects, Yang said.
China’s economic growth has revolutionized the way people live and has whet their appetite for a better quality of life and material possessions, Yang said. But the country’s current level of public services and social security fails to meet the residents’ demands, leaving them to feel increasingly insecure, he said. That’s why many of them opt to save money for the future.
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