Dawangjing follow-up 8: coping with sudden wealth

The life of Dawangjing villagers after becoming wealthy overnight

2010-05-19

 

http://news.xinhuanet.com/politics/2010-05/19/c_12116632.htm

 

The Assistant village party branch secretary said, when the villagers received their compensation funds [amounting to 1 million yuan or more, up to 10 million], very few of them had businesses to invest the money in. Therefore the vast majority bought additional residences, cars, or stocks.

 

The hottest topic of conversation was about the real estate values of residences

 

Villager Chen Xingquan’s family received six 2-bedroom residences in the designated replacement housing, Jingwang Jiayuan. Chen’s daughter-in-law said fortunately they chose to receive the residences, instead of taking the cash option. This year the price of residences in the area soared, and their six residential units are now worth double.

 

Those Dawangjing villagers who did take the option of increased cash in order to buy their own residence, and bought something right away, have done all right. They got in at the opportune moment, right before prices shot upward. Wang Lianzhong said, in nearby “Beiwu 40 Latitude” (residential development) and in Ganlancheng (“Oliver City,” another residential development) one saw many villagers buying properties. Pretty much everything in the area was bought up.

 

The villagers boldly spent their millions on properties, as though playing a game. Especially after the Wangjing 2010 first auction, buying flared up, and prices soared. Wang Lianzhong last year bought a residence at 10,900 yuan per square meter, and at present it has gone up to 20, 500. If he sold it now, his profit would be over 1 million yuan. Chen Xingquan’s in one stroke bought four residences, If he sold today, his profit would be 4 million.

 

However, other villagers did not fare so well. Those who waited for several months after receiving their compensation fund discovered that no matter how much money they had, it was not keeping pace with the speed with which real estate prices were going up. Now they are overcome with extreme regret [that they did not buy at the right moment].

 

Chen Xingquan said that his family had places to live, and that was something to depend on. They would not sell at this time.

 

Buying automobiles:

 

In one year, Dawangjing villagers bought 600 cars. There were some who said mockingly that every home had an Audi. Villagers said their standard for a good car was a Guangzhou Honda at 300,000 yuan. Anything lower than 150,000 yuan they would be embarrassed to buy. The most expensive car bought was a BMW X6 at over 1 million yuan.

 

Villager Wang Qiyan said that from 5th and 6th month of last year, an auto dealership in Dongxinzhuang started special promotions and sales aimed at Dawangjing villagers. It made a special reception room, with pictures on the wall of the village demolition, propaganda posters telling of the villagers’ new life in the future, stating that these new consumers will want to upgrade and update. A sales assistant was posted there, and if any customer was from Dawangjing, they were immediately ushered into this special reception room.

 

In the future the villages will change to urban workers, and receive assistance at getting jobs. But some mocked that there were families who previously had nothing, and now these had Audis. Wang Qiyan said this was an exaggeration, but it is possible some of these families now had a Guangzhou Honda.

 

Stocks

 

Villagers also used their compensation money to buy equity funds, but most of these suffered losses. Wang Lianzhong said, previously the villagers had all been small-scale individual farmers, who made money “eating tile” (renting to migrants). They did not have experience in managing money.

 

Once they received their compensation money, over 60% invested in equity funds. “During the demolition period, bank employees were on the scene, touting equity funds, treasury bonds, helping villagers fill out the application paperwork. Some invested 200,000, some as much as 1,000,000 yuan. ” At that time the stock market was at 3100 to 3300 points. Now it has dropped to 2056. Wang Lianzhong said, the bank fanned up enthusiasm, but the money is now stuck in funds that remain mired in values below the purchase price.

Buying goods

 

Wang Qiyan said, Previously I always looked at the price of things I was going to buy,  Now I don’t even look at the price, whatever I like, I get it. When I go to the supermarket, whether it is everyday items or electric appliances, I just buy it.

 

With all this money the question was, how to spend it.

 

Wang Qiyan said these days, when villagers gather at a wedding or a funeral. the talk is all about what they have bought. Where before they spent a hundred, now they spend over a thousand on whatever they want. Many villagers now travel, and when they return, they gossip about where they went. Wang Qiyan has never ridden a train, but now she is preparing for his first trip abroad.

 

 

81 year old Liu Jingxing received some 4 million yuan in compensation money. One part she gave to her three daughters, one part as financial help to her relatives in her hometown, and the remainder for her old age. If she needed a new air-conditioner, she just got one. Her greatest expense is from gifts and courtesies to others.  Previously Liu Jingxing didn’t dare attend social events, because she felt it was too much of a burden. But this year she has spent several tens of thousands yuan.  Whenever one of the grandsons of the main family branch married, she gave a red envelope with five or six hundred yuan. When she met them again, another gift of 200 yuan.

Liu Jingxing previously did not dare go anywhere far from home, even to visit her daughter in Guilin. For one thing, she didn’t have the money, and for another, she couldn’t find anyone to look after her cherished two pet dogs. But now that she has money, everything is easy.  They all go by airplane, she pays three thousand yuan to carry the dogs in storage. She doesn’t have to worry now that she can bring her dogs with her.

 

The oldest tree in the village, an old pagoda tree, has been kept and moved to a different place. This tree was a witness to several hundred years of Dawangjing village history. Wang Lianzhong said, this tree helps the villagers remember the village of Dawangjing.

 

Over the last year, Liu Jingxing has gradually become accustomed to living in a tall multi-story building. He said when he first moved here it was truly hard. For everything he needed money –the building maintenance fee, public sanitation fee, just for a spot to park your bicycle you needed to pay money. Then things were always disappearing. One time he parked his pedicab downstairs, and went up to get something, and when he came back, the bike-chain was gone.

 

His fellow villagers also had worries. After moving into  a tall building, for some old people whose health was not good there were inconveniences. Some didn’t know how to read, and didn’t understand signs. When they went out they got lost, mistaking one place for another. Even the up and down in the elevator was confusing.  Liu Jingxing said, although they were wealthy, the feeling of happiness never arrived.

 

The most difficult thing was not having friends, people to talk to, anywhere nearby.  Liu Jingxing said, now when he goes for a walk, and sees someone from the village, even if before it wasn’t someone he used to talk to,  now he feels a special connection, and happily talks about all sorts of trivial family matters. He sighed and said, one’s native place is hard to part from.

 

Reporters Li Liqiang, Ma Li.