If the family assets are not calculated in US dollars, it can be
said that China now has many millionaires, especially in large
cities such as Beijing, Shenzhen, Shanghai and Guangzhou, the
Beijing Evening News reported.
Most of these millionaires, however, have one thing in common –
their family assets are mainly their houses.
In Beijing, a house built within the Second Ring Road can be
sold at 20,000 yuan per square meter. So, if you happen to have a
house located in this area several years ago (no matter whether you
got it through your company's welfare system or you inherited from
your grandfather) and the house covers an area of 50 square meters,
then your house will be worth one million yuan and you are a
millionaire!
Even if you bought the house through bank loans, you are still a
millionaire if your assets are judged by the house value.
In this case, the so-called millionaires are actually created by
real estate developers because they have pushed the housing price
to such a high level.
Although China has so many millionaires, on the other hand, it
can be seen that most of these millionaires live a relatively poor
life.
Many "millionaires" struggle between work and home every day,
concerning about the price rise in daily-use commodities and happy
about the every penny they save through bargaining. So, even if
they have a house that is worth one million yuan, they do not
belong to the rich group, because once the housing price falls
down, their assets will shrink substantially, just like those
shareholders whose stock assets dropped greatly after Chinese stock
market experienced a big tumble on May 30. And for those who buy
their house through bank loans, their life will become a nightmare
– they might spend all their life working hard in order to pay off
the housing loans.
On November 19, when delivering a speech at the National
University of Singapore, Premier Wen Jiabao said China should
increase house supply by promoting the cheap-renting houses,
economical commercial houses and through market regulations on
commercial houses.
He emphasized that the economical commercial houses should be
sold mainly to "the middle-class group." In this case, it is
unreasonable for economical commercial houses to sell at 20,000
yuan per square meter.
On the other hand, such economical houses should be sold at a
price that is affordable to most middle-class people. So it might
be said that the 20,000-yuan-per-square-meter housing price might
not last long and many of the so-called "millionaires" whose assets
rise because of such high housing price might no longer be
millionaires in the near future.
(Chinanews.cn November 29, 2007)