Harry Dent, Economy & Markets Daily, Released on 4/12/16
If there’s anything the Chinese have going for them, it’s savings. Only a handful of countries have a higher savings rate than they do. For a still relatively poor emerging country with GDP per capita about a fifth of that in the U.S., the Chinese get an A+ in this area.
But if diversification and asset allocation are the key to preserving wealth, then the Chinese get an F!
The reason: 75% of their wealth is in real estate, with the rest largely in cash. They’ve overinvested in one illiquid and bubbly asset that they wrongly believe can only go higher. Relative to income, China has seven of the 10 most expensive cities in the world.
Harry Dent is a Fortune 100 consultant, new venture investor, noted speaker, bestselling author, and the founder and senior editor at Dent Research, where he dedicates himself to identifying and studying demographic, technological, and geopolitical trends. He has a free daily newsletter at www.harrydent.com called “Survive and Prosper.” Mr. Dent accurately predicted Japan’s collapse in 1989, the dot-com bubble-bust in 2000 and the housing bust in 2006 to 2007 (among many other things). He’s written numerous books, including The Great Boom Ahead (1992), The Great Depression Ahead (2008), The Great Crash Ahead (2011) and The Demographic Cliff (2014).