I know China has taken its lumps in the last year. But despite all the bad news you’re hearing about China, I maintain that China is not in anywhere near as bad shape as the press and other pundits are leading you to believe. I’m back on-the-ground in Asia now and lots of exciting things are happening over here.
I believe some of the best profit opportunities this year will be found in China. Why? Many reasons. Chief among them: The financial strength now inherent in China’s economy. Take a look at these stats …
* $2 TRILLION in cash in its kitty
* At least $585 billion being spent on infrastructure
* Retail sales still robust, growing at an annual rate of 21%
* Disposable income on the upswing, rising 7% in 2008
* Rural incomes also exploding higher, up 7% for 2008
* Fixed-asset investment growth up 26.8%
* Property investment up 22.7%
Plus, Beijing is slashing interest rates, bank reserve requirements, taxes, tariffs and even implementing relaxed standards for purchases of second homes and investment properties.
Meanwhile, the Chinese stock market is in deeply oversold conditions — and many great Chinese stocks are now trading at very cheap valuations, as low as 2 times earnings!
I expect China’s stock market to head substantially higher this year retracing at least 50% of its decline last year.
Bottom line: Of the select investments I’d make in these wild and crazy times, China is one of them.
To get an in-depth look at my other 2009 forecasts and my core recommendations that will help make you a bundle of money this year, see my Real Wealth Report.
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{ 8 comments… read them below or add one }
Larry - I read Tony Sagami & Martin and does he not say that China is looking substantially weaker & to use FXP to make $ on the downside right now? Don’t you guys see it the same way?
Larry Edelson Reply:
February 9th, 2009 at 7:55 pm
No, Tom, I don’t. I see China bottoming now, and heading higher.
Hello Larry
You mention today (2/5/09) in your M & M that China added 11.13 million jobs…yet I read the other day that China lost 26 million jobs (the site and reference are included below for your perusal). Which am I to believe?
http://www.independent.co.uk/news/world/asia/beijing-rocked-by-26-million-lost-jobs-1543627.html
Thanks.
Keep up the good work and steadfastness in your convictions on gold and the dollar….time will tell who is right and who the real and experienced “trader” is in the camp.
Kindly,
Tom
Larry Edelson Reply:
February 9th, 2009 at 7:48 pm
There no doubt has been huge job losses in China recently. But the figures being quoted by the press are merely estimates, and they run the gamut. They are undoubtedly on the high side. Meanwhile, the figure I quoted in my 2/5/09 Money and Markets is for 2008, and a final full year figure of job creation.
Larry,
All of your information referred to on China’s economy is based on 2008 figures. We have now had a huge adjustment in that and all we hear on the news is the job losses in China and millions of workers being sent back home to the countryside to fend for themselves. Don’t you think that has some bearing on how we should perceive the future of China’s economy? 2008 was the best year ever for many businesses but now those businesses are unable to remain profitable.
thank you..
Larry Edelson Reply:
February 9th, 2009 at 7:51 pm
The 20 million odd figure you’re hearing about is only an estimate, and I doubt very much the Chinese economy lost 20 million jobs in the last five weeks. The figure I published is for 2008.
Larry,
In your Thursday, February 5, 2009 Money and Markets column, you list some companies in Asia that you are following. Weren’t these the same companies that Tony Sagami listed over a year ago? Maybe it was you, but it sure seemed like it was Tony. I remembering listening to one of you two describing them in an on-line audio presentation. In fact, I still have the companies written down: New Oriental Education, Mind Ray Medical, China Communications Construction, ABB Limited, E House and China Mobil. Maybe you both spoke on that audio, or I just thought that it was Tony because it seems like he focuses more closely on Asia.
Sincerely,
Jeff Kelsey
Larry Edelson Reply:
February 10th, 2009 at 2:05 pm
Tony and I both like those companies!