Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Hottest Sports Stock Of 2020 - 23rd Sep 19
Stocks Wedge At The Edge – Front And Center - 23rd Sep 19
Stock Market Top Almost Confirmed - 23rd Sep 19
Thomas Cook COLLAPSE! 300,000 Passengers Stranded, Flights Cancelled, Planes Grounded - 23rd Sep 19
Massive Stock Market Price Reversion May Be Days or Weeks Away - 22nd Sep 19
How Russia Seized Control of the Uranium Market - 22nd Sep 19
Dow Stock Market Trend Forecast Update - 21st Sep 19
Is Stock Market Price Revaluation Event About To Happen? - 21st Sep 19
Gold Leads, Will the Rest Follow? - 21st Sep 19
Are Cowboys Really Dreaming of... Electric Trucks? - 21st Sep 19
Gold among Negative-Yielding Bonds - 20th Sep 19
Panicky Fed Flooding Overnight Markets with Cash - 20th Sep 19
Uber Stock Price Will Crash on November 6 - 20th Sep 19
Semiconductor Stocks Sector Market & Economic Leader - 20th Sep 19
Learning Artificial Intelligence - What is a Neural Network? - 20th Sep 19
Precious Metals Setting Up Another Momentum Base/Bottom - 20th Sep 19
Small Marketing Budget? No Problem! - 20th Sep 19
The Many Forex Trading Opportunities the Fed Day Has Dealt Us - 19th Sep 19
Fed Cuts Interest Rates and Gold Drops. Again - 19th Sep 19
Silver Still Cheap Relative to Gold, Trend Forecast Update Video - 19th Sep 19
Baby Boomers Are the Worst Investors in the World - 19th Sep 19
Your $1,229 FREE Tticket to Elliott Market Analysis & Trading Set-ups - 19th Sep 19
Is The Stock Market Other Shoe About To Drop With Fed News? - 19th Sep 19
Bitcoin Price 2019 Trend Current State - 18th Sep 19
No More Realtors… These Start-ups Will Buy Your House in Less than 20 Days - 18th Sep 19
Gold Bugs And Manipulation Theorists Unite – Another “Manipulation” Indictment - 18th Sep 19
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19

Market Oracle FREE Newsletter

How to Invest in the Esports Revolution

China's Government Set on Making Stock Market Bottom

Stock-Markets / Chinese Stock Market Jul 24, 2008 - 05:33 AM GMT

By: Money_and_Markets

Stock-Markets Tony Sagami writes: For thousands of years, China was ruled by dynasty after dynasty before finally becoming a republic in 1912. In 1949, the Communist People's Republic of China was formed after the defeat of the Nationalist forces. And in 1978, Deng Xiaoping ascended to power and began a series of economic reforms.


Since then, China's economic years have been impressive, but I think the most amazing thing is that this economic miracle happened under a Communist regime.

Even though the Communist Party regulates practically every aspect of both public and private life in China, capitalism has flourished without democracy for one simple reason: The Chinese leaders want it.

You see, the Chinese government gets what it wants because that is what happens under a totalitarian regime with $1.8 trillion in its pocket.

Let me give you three recent examples:

Cut the air pollution in Beijing. Starting last Sunday, cars with license plates that end in an odd number are banned from the roads every other day, alternating with cars that have even-numbered plates. The Chinese government estimates that this will take one million cars off the road each day.

When Beijing wants less air pollution, it just orders cars off the road!
When Beijing wants less air pollution, it just orders cars off the road!

Chinese drivers may not like it, but they don't have any choice and to dull the inconvenience, car owners won't have to pay road and vehicle taxes for three months.

No Fido on menus. You and I may consider it horrific to eat dog, but to millions of Chinese, dog is considered delicious as well as nutritious. The Chinese have eaten dog for 7,000 years and it is widely believed to lower blood pressure as well as boost virility.

But out of concern that dog dishes might offend animal rights groups and Western visitors, the Beijing Food Safety Office ordered official Olympic hotels and restaurants that are popular to foreign visitors to stop serving dog meat "to respect the dining customs of different countries."

The meat of Saint Bernards, by the way, is considered the most flavorful.

Don't break the law in China. The Chinese government does not release the numbers, but according to Amnesty International, China is the world's leader in state-sanctioned executions. The death penalty is applied to more than 60 crimes including corruption, drug trafficking, embezzlement, and even tax evasion!

Amnesty International estimated that China executed 470 people in the month of April and believes that the annual number is around 10,000. As you can see, the cost of crime in China is extremely high.

Communist Party Control Extends To Almost Every Aspect Of Personal, Political, And Especially Economic Life

The Chinese government has figured out that the fastest way to eradicate poverty and increase its standard of living is by growing its economy. China has successfully reduced the number of its citizens living below the poverty line from 200 million in 1981 to less than 30 million today.

If the Communist Party wants Chinese stocks to rebound, they'll make it happen.
If the Communist Party wants Chinese stocks to rebound, they'll make it happen.

One of the biggest threats to China's economic prosperity today is the country's stumbling stock market. The mainland stock market (which is closed to foreign investors like you and me) has lost more than 50% of its value from its November high and millions of Chinese investors are stinging from the losses.

And the Chinese government has flat out vowed that it will make sure the stock market doesn't fall any further. Shang Fulin, chairman of the market watchdog China Securities Regulatory Commission, has reportedly said "total efforts" must be made to preserve the stability of the capital market.

That comment was followed by an article in the government-controlled Beijing People's Daily that recommended 10 government measures to revive the stock market. Some of these include:

  • Stricter standards to regulate non-tradable share conversions ...
  • Controlling large-scale new share issues ...
  • Establishing a timetable for the launch of index futures to stabilize prices ...
  • Encouraging stock repurchase by listed companies ...
  • And setting up a special government fund to help shore up share prices.

Did that last one perk up your ears? It should have! A senior Chinese securities official, Jiang Lianhai, is in favor of setting up a fund to help stabilize the stock market, the first time a government official has openly suggested direct government support of the stock market.

As Lianhai recently told the China Daily,

"It's necessary and urgent to set up buffer funds to confront big speculators and stabilize the mainland market. The government had no reason to stay on the sidelines of the troubled stock market and its intervention could help stem destabilization."

Let me tell you, you won't find mid-level officials making public comments that are not part of a well-orchestrated government plan.

So Make No Mistake: The Chinese Government Wants the Stock Market to Bottom ... And What They Want, They Get!

Look, I can't guarantee that this is the absolute bottom of the Chinese stock market's decline. But I sure think it is. With the Olympics right around the corner, the last thing Chinese officials want is the country's stock market taking anything away from China's new status as a modern, prosperous country.

I believe that any dollars you put to work in China today should be the most productive investment you'll make this year.

Where should you look? I've mentioned these names several times in the past, but I think it's worth looking into companies like China Mobile (CHL), E-House (EJ), and New Oriental Education (EDU).

Or, if you're more of an ETF investor, check out either iShares FTSE/Xinhua China 25 Index (FXI), SPDR S&P China (GXC), or PowerShares Golden Dragon Halter USX China (PGJ).

Because as I told you earlier, what China wants ... China gets ... and what it wants now is for the stock market to move higher.

Best wishes,

Tony

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Streetviewer
03 Oct 08, 20:24
Wall Street Crooks Vs. Communist

Wall Street Crooks are a lot worse than Communists.

Communists may want to run a planned economy, which is not always bad. Wall Street crooks wants to naked short the entire market into zero to maximize their stupid profit. These crooks would kill chickens for eggs. They short the entire financial sector down, and they kidnap US government, their next goal is to make entire US people to their slaves. SEC does not take decisive action. SEC proposed to disclose the naked shorts, but they did not do it eventually. SEC keep giving green light to illegal naked shorts, which results in Reg SHO list miles long, and which result in many great companies taken down for not reason.

Many people are seriously doubting that SEC is a part of the crime!


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules