Chinese People Are Buying Gold, Taking Money Out of Banks and Stock Market

A woman holds a gold bar to mark the year of the snake in Beijing in 2012. STR/AFP/Getty Images

Chinese people are starting to feel the pressure of economic slowdown. As China’s yuan continues to devalue, and several small- and medium-sized banks have recently filed for bankruptcy, many Chinese are choosing to buy gold or take their money out of banks to protect their assets. 

Additionally, the Chinese government issued an unusual notice in late June to encourage Party members and cadres to invest in stocks, which is interpreted by many as a desperate move to rescue China’s economy. 

Currency Devaluation

China’s yuan or renminbi (RMB) fell sharply on July 2, hitting its weakest level against the U.S. dollar in a week. By 4:30 p.m. Beijing time, the onshore RMB closed at 6.8835 against the dollar, a fall of 391 points from the previous trading day. Offshore RMB closed at 6.8856, which was a drop of nearly 300 points.