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China has millions of 'poor' millionaires
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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.

( November 29, 2007)

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