Five Reasons to Put Your Money In China Now
China is the greatest growth zone in economic history. The third largest economy in the world, China is projected to pass Japan in the coming year and to surpass the U.S. economy as soon as 2020. So, when you're deciding how to allocate your investment portfolio, do you want to put your money in the U.S. – a country projected to grow by less than 3% in 2010 – or in a country that is expected to more than triple that? Here's why I'm putting my money in China.
The Five Things You Need to Know About China
Legendary investor, Bill "The Bond King" Gross made headlines recently when he said that China will one day have to contend with a bubble of its own making. Gross runs the world's biggest bond fund at Pacific Investment Management Co. LLC (PIMCO). Millions of investors reacted just as you would expect when someone of his prominence makes such a pronouncement – they panicked.
While I can see how Gross would arrive at such a conclusion, his comment about China is akin to the economist who tells us that "the U.S. economy will recover."
In either case, just when and how isn't clear.
Has Asia Dethroned Detroit as the Auto Sector Leader?
Back in May I recommended that readers should buy shares in Ford Motor Co. (NYSE: F) on the grounds that the U.S. carmaker would gain market share from the bankrupt General Motors Corp. (OTC: MTLQQ) and Chrysler Group LLC. Ford’s third-quarter profit and healthy October sales growth show I called that one right. One doesn’t like to blow one’s own trumpet excessively, but if you’d followed my advice in May, you would today be sitting on a profit of nearly 50%.
However, while I admire Ford for its brilliant strategic decision not to cave in and accept government-sponsored bankruptcy, and wish it well in its future battles with GM and Chrysler, I’m not sure the company that Henry founded represents the future for the global automobile industry.
More likely – while Chrysler will become a money-pit that is closed only by political means, and GM will limp on as a smaller and marginally profitable U.S. and European producer – Ford will slim down to become a specialty producer of cars tailored to the tastes and needs of the U.S. market. It’s well known that the auto preferences of U.S. consumers differ greatly from those of their European counterparts.
ArcelorMittal Edges Its Way Into China
By Jason Simpkins Associate Editor The world's largest steel company, Luxembourg-based ArcelorMittal (MT), expanded its presence in China last week when it acquired a 28% stake in a Chinese steel mill for $647 million. The company announced last Wednesday that it is now a minority shareholder in China Oriental Group Co. Ltd., whose main asset [...]
General Motors Shifts into Growth Mode by Driving a Cleanup Effort in China
By Jason Simpkins Associate Editor Most experts view the pollution problem in China as one of the world's biggest problems. But General Motors Corp. (GM) Chief Executive Officer Rick Wagoner views it as one of the world's biggest business opportunities. With incomes soaring and a new wave of middle-class consumers emerging across China, car and [...]
Why India Is Losing the Race with China – and What It Can Do to Gain Ground
By Jason Simpkins Associate Editor India, no doubt, has corned the global market in the service sector. Think of it as the call center to the world. But China has established itself as the world's factory floor, making everything from Barbie dolls to match sticks. Yet while the growth in India has been impressive (its [...]
Would Buffett Give China Mobile a Thumbs Up or Down?
By Mike Caggeso Associate Editor China Mobile Ltd.'s (NYSE:CHL) 30% nine-month profit growth is just as impressive as it is worrying – to Warren Buffett at least. The world's largest mobile-phone operator credited rapid subscriber growth and gains in value-added businesses for its growth, which has handed investors 120% gains on the company's stock since [...]
Bear Stearns and China Citic swap $1 Billion Stakes in Each Other
By Mike Caggeso Staff Writer Bear Stearns Cos. Inc. (BSC) and Asia's largest securities firm, China Citic Securities Co., agreed to invest $1 billion in each other. The deal secures broad access to China investment-banking business for Bear Stearns, who lags in China investments compared to its rival Wall Street securities firms. Its third-quarter profit [...]
Chinese Inflation Continues Unabated, Reported at 6.2% for September
By Jason Simpkins Staff Writer China had a 6.2% inflation rate for September, and can expect inflation to continue at that high rate for “a few months,” – despite renewed efforts to hold down the general level of prices – the National Development and Reform Commission, China’s top agency for economic planning, has reported. The [...]