Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
BREWING FINANCIAL CRISIS 2.0 Suggests RECESSION 2022 - 28th Jan 22
Financial Stocks Sector ETF XLF $37.50 Continues To Present Opportunities - 28th Jan 22
Stock Market Rushing Headlong - 28th Jan 22
The right way to play Climate Change Investing (not green energy stocks) - 28th Jan 22
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How Investors Can Profit From China's Economic Boom

Stock-Markets / China Stocks Feb 03, 2010 - 08:50 AM GMT

By: Tony_Sagami

Stock-Markets

Best Financial Markets Analysis ArticleTwenty-five hundred of the world’s most influencing corporate and government leaders gathered in the Alpine ski resort of Davos, Switzerland last week.

They weren’t there for skiing, although I’m sure some did. What these world leaders gathered in Davos for was the 40th World Economic Forum.


The World Economic Forum is a global organization committed to “improving the state of the world” and “engage leaders from all walks of life to shape the global agenda.” Those are lofty goals and they tackle everything from climate change to population growth, and even the economics of happiness.

I’m sure they had a lot to discuss given the weak state of the global economy and I hope that they listened closely to what the Chinese leaders had to say because China is one of the few economic bright spots in the world.

The Chinese economy grew by 8.7% in 2009 and by an amazing 10.7% in the fourth quarter of 2009. Those are impressive numbers on their own merit, but even more amazing when you realize that the rest of the world’s economy shrank by 0.8% last year, the first contraction since World War II.

China’s strong economy is rubbing off on the rest of the world. The China National Statistics Bureau calculates that about 20% of world economic growth is attributable to China and the United Nations estimates that China has accounted for half of world economic growth this decade.

China isn’t ready to slow down, either. The International Monetary Fund released its Global Economic Update and said that it expects the global economy to grow by 3.9% in 2010. The fastest engines of growth remain, as they have for years, in Asia. The IMF estimates that China’s growth rate will be 10% this year and 9.7% in 2011.

About 20% of world economic growth is attributable to China — half of world growth this decade alone, according to the U.N.
About 20% of world economic growth is attributable to China — half of world growth this decade alone, according to the U.N.

China isn’t the only hot spot in Asia, either. The IMF expects India’s growth rate to be close to 8% both years.

The picture isn’t so rosy for the mature, established countries. The IMF expects the U.S. economy to grow 2.7% this year and then drop to 2.4% growth in 2011, Germany to grow by a measly 1.5% in 2010 and 1.9% in 2011, Britain by 1.3% this year and 2.7% in 2011, and Japan grows 1.7% in 2010 and 2.2% in 2011.

Don’t Underestimate the China Boom

Do I agree with the IMF? Well, the IMF (as well as Wall Street) has consistently underestimated the Chinese economy and consistently overestimated the U.S. and European economies. I am confident that China will do much better than 10% and for the U.S. to struggle to stay out of a recession.

But whether you agree with the scale of my or the IMF’s predictions, the one thing that I think is unquestionable is that China will grow at four, five, or more times the pace of the U.S. economy.

I don’t say that because of any detailed research reports I’ve read. I say that because I’ve personally visited factories, poked my nose into loading docks to see how full the trucks are, dodged forklifts, talked to everybody — taxi drivers, janitors, construction workers, waiters, cashiers, policemen, housewives — that would give me the time of day.

You see, I don’t trust those consumer sentiment surveys that universities and brokers put out. I do my own boots-on-the-ground research and that gives me what I believe is a much more accurate picture of the economy.

And what I’m finding is an enthusiastic optimism from Chinese about their individual situation and the country that they are so fiercely proud of.

As an investor, you have to ask yourself which part of the world deserves your investment dollars. Do you want to hitch a ride on a slow-moving station wagon or a rip-roaring sports car?

Chinese Vice-Premier Li Keqiang told the global leaders at Davos, “Though it is winter, here we feel the spring of the coming economic recovery.”

Top No-Load China Funds 2009
Oberweis China Opportunities (OBCHX)
+122%
ProFunds Ultra China (UGPIX)
+117%
The USX China Fund (HPCCX)
+104%
Guinness Atkinson China (ICHKX)
+88%
Matthews China Fund (MCHFX)
+74%

He’s right and if you want to add more China to your portfolio, you have several choices.

There are several excellent mutual funds (see list) that focus on China, but I think you’ll do much better with individual stocks instead of funds. Why? Mutual funds and ETFs are often heavily invested in large, inefficient, government-run companies instead of the fast-growing companies run by Chinese entrepreneurs.

Investing in Chinese stocks is easy. In fact, you don’t even need to leave the comfort of your current broker to invest in Chinese stocks. I say that because there are more than 100 Chinese stocks listed on the New York Stock Exchange and the Nasdaq.

I’m talking about huge, multi-billion-dollar companies, such as China Mobile (CHL), CNOOC (CEO), New Oriental Education (EDU), China Life (LFC), Mindray Medical (MR), PetroChina (PTR) … and many more.

In fact, four Chinese companies just went public last week in the U.S.: China Education Alliance (CEU), Andatee China Marine Fuel Service (AMCF), China Electric Motor (CELM), and Century 21 China (CTC).

By the way, you would have learned about those IPOs if you are a regular reader of my blog. It’s free and full of what I think is the most important and timely information about successfully investing in Asia.

Do yourself a favor. Cut back on your U.S. stock holdings and increase your weighting to Asian equities, especially China. I believe you’ll be delighted with the results and the richer for it.

Best wishes,

Tony

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


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


Post Comment

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