[AngrySkillzz]

The root cause is demographics. People have a standard life cycle - you save when you are young, peak saving around a decade before retirement, and then spend savings in retirement. What is different now is that China has a massive boom in working-age population, and they are rapidly becoming more affluent, and the have a savings rate that is like 10x of the average American. I wouldn't say they are "so rich," just that savings rates have a cultural component.

So anyway, you have this massive influx of savings flowing into the system, buying up investable assets to save for retirement, and thus bidding up prices. They call this the "global savings glut." There are OLG (overlapping generation) models that show how this behavior works in a simplified setting; you can easily get over-saving, dynamic inefficiency, and "rational bubbles" as an outcome in an OLG model with different demographic curves.

[s17n]

I don't need to do any research to tell you that the total wealth of the Chinese middle class is a lot less than the total wealth of the top 1% of Americans.

[imtringued]

An aging economy would experience inflation since there aren't enough young people to take care of the old people. In practice old people keep working because they can't retire.