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Chinese investors are becoming more creative with their money as traditional markets have dried up, Dinny McMahon reports for The Wall Street Journal.Real estate, the stock exchange, and bank deposit rates no longer offer the returns investors expect, but dead caterpillar fungus just might.
Speculation is emerging in Chinese art, liquor, furniture, medicine, and yes, fungus–and it’s not yet clear if this is yet another bubble.
Long Xingchao, president of the information centre of the China Association of Traditional Chinese Medicine, told McMahon that “there’s nothing to pop,” referring specifically to traditional medicines like red ginseng and false stalwort, whose prices have gone up considerably in two years.
But McMahon points out that art exchanges have seen some of the biggest boom-and-busts. A man who put up his house as collateral to finance precious jewels ended up losing his house. And the Chinese government has reportedly called this frenzy “price manipulation.”
It remains to be seen which markets will thrive, if any, and which won’t.