Fri. Jun 2nd, 2023

10 years ago the British handed control of Hong Kong back to the Chinese.  This is the start of massive changes to that particular economy.  State controlled companies were placed in private hands and small business started initially to blossom.  The Chinese economy started looking more and more such as for instance a free market.

The end result was incredible growth.

China has significantly more than 1.8 billion citizens and as their economy develops, the middle-income group grows.  Now the GDP of China is expected to improve significantly more than 10% every year guizhou panjiang refined coal.  This economic growth is really exciting that Jim Rogers, one of the finest money managers of our time, uprooted his entire family and moved to Asia.  When asked why, he said “I really do not need to offer Chinese stocks.  I want to own them forever and I want my [four year-old] daughter to own them.”

Now that’s what I call a long term investment strategy.

Over the last several years, investors have made a lot of profit the Chinese markets.  If you’d bought China 25 Index from the beginning of 2005 you would have made significantly more than 315% on your cash by October 2007.

Nevertheless the excitement in the Chinese markets got only a little beyond control last year.  As a matter of fact, in May I warned of a near term bubble.  As as it happens I was right. but only a little early on my call.

The index started falling in October of 2007.  Over the last month or two, it had fallen almost 33%.

Currently, China is emerging from an economic slumber.  Politically, they’re a communist country.  Economically, they’re waking up to a free market revolution.  I recall the influence China had when I was employed in Singapore.  It included language, social customs, food, and even economics.  Now they’re influential the world over.

In the short-term, the outlook appears uncertain.  Some economists believe the economic slowdown in the United States could spread to emerging markets.  For the reason that scenario, the Shanghai market might fall further.  Some advisors have gone so far as suggesting that we steer clear of the Chinese markets entirely.

I do believe they are horribly wrong and somewhat shortsighted.

Unless you’re centered on very short-term trading, now’s the time to go long China.  The nation is in the first stages of a multi-decade economic expansion.  Their economic growth is second-to-none, and their infrastructure is still in the first stages of build out.

Don’t let the recent market correction scare you away.  Consider it as a great way to expand your emerging market exposure at a 30% discount. A great way to have broad exposure to the Chinese market is through the iSharesFTSE/Xinhua China 25 Index ETF (FXI).

Brian Mikes may be the editor of the Dynamic Wealth Report, a free investment newsletter that provides investment ideas and news you can’t get from the mainstream investment press. Brian and his team bring decades of Wall Street and Silicon Valley experience to help you discover profitable trading ideas you should use today.

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