In a report on Wednesday, Lu Ting, the Japanese brokerage’s chief China economist, said Chinese households parked the majority of their wealth in the struggling property market. Stock holdings accounted for 1.3 per cent of total household assets, while the proportion for properties was 60 per cent, the report said, citing data published by China’s central bank in 2019.
“Chinese households’ assets are still dominated by property, implying a limited wealth effect from rising stock prices,” Lu said.
Investors who were counting on a bullish stock market to help revive the Chinese economy – particularly consumer spending after some key July economic data suggested a broad-based slowdown – were likely to be disappointed, Lu said. In an earlier report, Nomura said China’s growth would deteriorate significantly in the second half, with the effect of a trade-in programme for household appliances fading and high tariffs hurting exports.
Stocks are more significant in other global economies, particularly the US. American households allocated 65 per cent of their assets to financial products, mostly stocks and funds, while about 25 per cent went to real estate, according to official data.
