More Signs of Economic Recovery in China

Robert Hsu, June 02, 2009

The Chinese government's efforts are paying off. As I've discussed on a number of occasions recently, we're seeing China's economy bounce back, putting it on track for a full recovery in the second half of the year.

This week, we received more positive news that, once again, reaffirmed my view that China is bouncing back strongly. Manufacturing expanded for the third straight month. The Federation of Logistics and Purchasing reported that its Purchasing Manager's Index read 53.1 in May, indicating expansion as the rate was over 50.

Due to the third month of expansion in China's manufacturing sector, China's Shanghai Composite Index jumped 3.4%. Now the index has gained nearly 50% year to date. In addition, we saw a much-needed gain for the MSCI Asia Pacific Index -- it rose 2.8% to 104.92. The increase allowed for a 49% rise since its five-year low on March 9.

The Chinese economy is doing better than expected, and it is giving investors a reason to purchase Chinese stocks. The government's $586 billion stimulus package seems to be working, which is creating confidence in the country and growth for the economy.

U.S. Treasury Secretary Timothy Geithner recently spoke in Beijing and praised China for its help in the slow turn-around of the global recession.

Although it won't be smooth sailing ahead for China, I believe this is the first of many steps that the country is taking on its path to economic recovery. As the world's third-largest economy, each positive economic data report is imperative to the vitality of not only its economy and stock market, but most of the world as well.

And there are a number of Chinese companies benefiting from the economic turnaround taking place in China today. Year to date, three of my top China Strategy companies are up nicely: 1) The Google of China, up 119%; 2) China's leading real estate services company, up 94%; and 3) A major Chinese ETF, up 86%.

Don't miss out on the incredible profits and opportunities to come -- join China Strategy today!

More Signs of Economic Recovery in China

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