Chinese millennials look beyond property investments to build wealth

Like millions of other young Chinese, Mr Byron Zhang thinks he has missed out.

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For his parents' generation, investing in real estate was the surefire route to prosperity and security. Now, as prices slump, the population shrinks, and unfinished and unsold apartments stack up, the dream of riding that boom has crumbled.

"If you still count on investing in property as a means of growing your fortune, you are not quite right in the head," said Mr Zhang, 37, who co-founded a pharmaceutical start-up in technology hub Shenzhen.

Mr Zhang and his peers are not giving up on building wealth. They have seen that a well-paid job can take them only so far, while the right investment can be transformative. More than 90 per cent of university-educated Chinese citizens aged 22 to 32 say investing is a key part of their life plan, according to a February survey of 3,000 people by Invesco.

But where to invest their savings? Capital controls and regulations limit purchases of shares on overseas stock exchanges. Cryptocurrencies are banned. Bonds do not yield enough. Returns from bank-issued wealth management products have slumped. Also, the Chinese government has essentially shuttered once-hot alternatives such as peer-to-peer lending that had attracted more than 50 million investors.

Then there is the domestic stock market, which older Chinese dismiss as a form of gambling after two epic boom-and-bust cycles in as many decades.

Mr Hans Fan, head of China financial research at brokerage CLSA, estimates that cumulative flows into financial markets from all Chinese households will exceed US$18 trillion (S$24 trillion) between 2021 and 2030.