Its fascinating to think about the knowledge of investors in China. How should people know how to invest sensibly if none of their parents or grand parents ever were able to own any such assets (because of poverty and communism)
Combined with Chinese people all saving too much and not spending on consumption - there is a huge pool of money just floating around going into every possible asset.
Its a bad combination that has to end badly sooner or later. (I've been saying this for 15 years but proved wrong every year).
This is getting downvoted (perhaps due to the rough tone) but there's a lot of truth to it. It's part of a larger phenomenon that isn't limited to investing as well. I think a lot of inexperienced outside observers of China from developed countries tend to miss that while some parts of China now have many of the trappings of developed nations, the rapid pace with which China has evolved means that they lack a lot of the knowledge that developed countries have about how to effectively manage/use these trappings.
Take driving for example. Cars are everywhere in Chinese streets these days, but most of them appeared in the last 10 years. Imagine being in a city where everyone is a new driver, and nobody's parents ever drove and thus couldn't teach them to drive. The same goes investment as well, and in many other areas.
This isn't to say that there aren't a lot of smart Chinese who read stuff on the internet/learned in school/figured it out on their own (there are), but the aggregate cultural knowledge level in a lot of things people in developed countries take for granted is often noticeably more undeveloped in China. They'll no doubt grow out of it with time though (and hopefully without any significant catastrophes).
There is also a lot of institutional knowledge missing. The US knows since the 1929 crash that it is very dangerous to let retail investors buy stocks on margin and there are very strict rules to limit that. I understand buying stocks on margin was common for retail investors in China and greatly contributed to the volatility of the Chinese stock market.
> How should people know how to invest sensibly if none of their parents or grand parents ever were able to own any such assets (because of poverty ...)
Many study Finance for this education. At least in America, Europe, Africa, Japan, Korea, etc.
Combined with Chinese people all saving too much and not spending on consumption - there is a huge pool of money just floating around going into every possible asset.
Its a bad combination that has to end badly sooner or later. (I've been saying this for 15 years but proved wrong every year).