China Strategy Archive

Gold prices are high. In fact, they're at record heights -- and the question is, where will gold go from here? Well, to put it simply, gold will continue moving higher for the near term. While there will be pullbacks, they represent buying opportunities rather than the end of the gold bull market. A combination of strong demand from China and continued weakness in the dollar will continue to drive commodity prices higher -- especially gold.

China's vehicle sales have surpassed the 10-million barrier -- consolidating their position as the number-one auto market in the world. As a result, investors are flocking to the sector. In fact, I know investors who purchased Boyd Gaming Corporation (NYSE: BYD) -- thinking they were buying the Chinese automaker that Warren Buffett made famous: BYD Company! But what all these investors are missing is that domestic Chinese automakers aren't the best way to play this opportunity.

China has created some 7.6 million new jobs in the first eight months of this year -- putting the country fully on-track to surpass their full-year employment target! On the flip side, the U.S. has lost some 7.3 million jobs since the recession began. So, though the U.S. employment data isn't currently weighing too heavily on the market, the long-term effects will be very damaging. For now, our best investment bet is in China, taking advantage of their dramatic growth and speedy economic recovery.

The Chinese government's goal is to provide basic universal healthcare for its entire population -- all 1.3 billion -- by 2020. As a result, the market value of China's pharmaceutical market is expected to jump to about $120 billion by 2020. So to take advantage of this dominant and growing market trend, an excellent trade right now is the leading supplier of traditional Chinese medicine. Shares recently pulled back, making now a perfect time to load up before the next leg up!

Hot money has been flowing into ETFs like never before. Investors are realizing that they don't have much exposure to emerging markets and are moving money like crazy to make up for it. So what emerging market ETFs are performing well this yet? Well, there are several -- In fact, I recommend two of these ETFs in my China Strategy service.

Because of China's economic strength this year, the Shanghai A-Share Index in China is up a whopping 71% year-to-date. Compare that to the 15% gain in the S&P 500 and the 11% gain in the Dow Jones Industrial Average, and it's not hard to see why China is offering a better investment opportunity right now. China presents a multitude of opportunities for investors seeking diversification and growth. And this list of 10 reasons highlight why I believe that our best opportunities right now are in China.

China's third-quarter GDP results were announced today and showed that the Chinese recovery is moving along at record speeds. China's GDP rose 8.9% in the third quarter compared to last year. That is up from 7.9% for the second quarter and 7.1% for the first half of the year. So China's economy is currently outperforming all other countries in the world, so we can expect more positive news from the country in the weeks and months ahead. And, as you might have guessed that bodes particularly well for investors.

Despite the great strides that China has undertaken to become an economic superpower, there are some investors who remain unsure if China is the "real deal" because of the country's history of socialism and authoritarian government. However, the Chinese system known as "socialism with Chinese characteristics" has become more capitalistic than almost all other major economies. With no capital gains tax, property tax or tax on real estate investment gains, China is actually more investor and capital friendly than the U.S.

Today is World Food Day -- an opportunity to focus on wordwide hunger. China, the world's most populous country, is in the limelight -- but what many don't know is how far the country has come. 30 years ago, China depended on world aid to feed many of its citizens, while today China is actually sending food aid to many developing countries. And the government in China is very aware there are still many improvements to be made to the country's agricultural infrastructure. So the government has banned chemical-based fertilizers, which are hard on farmland, and is moving to organic fertilizers as a part of the nation's green revolution.

As China's standard of living continues to rise for much of its population, one area the government is especially focused on improving is healthcare. So let's take a look at how China has improved over the last 60 years -- and where they're headed for the future. Additionally, we've loaded the China Strategy portfolio with plays on China's push for better healthcare, so we'll go over three opportunities that I'm expecting to especially benefit from the healthcare initiatives that China has undertaken.

South Korea is the first East Asian economy outside of China to recover from the global recession. And on most recent trip to China, Hong Kong and Taiwan, I saw many signs of the China spillover effect pulling many countries in the region out of the global economic slowdown. In the case of South Korea, the country just saw its economy expand at the fastest pace in six years -- which means it's time to take a closer look.

China is the highest contributing country to the world's economic growth -- in fact, China makes up nearly 20% of the total world economic growth. That's a massive change from the paltry 2% it made up just 30 years ago. With such an extraordinary pace, it's not hard to see why China is rapidly expanding its influence on the world. Additionally, China is on track to become the world's second-largest economy by next year.

Festivities for China's National Day were kicked off with a bang -- the Chinese government went all out to make this year's celebration of the 60th anniversary of the People's Republic of China the biggest and best ever seen in China. And they received overwhelming support, with over one million volunteering to help out with security and the parade. The Chinese have a lot to celebrate -- both their hard-won peace from civil war 60 years ago, as well as the modernization of China today.

So far, China's insurance market has followed the footsteps of the U.S. insurance industry -- and where the U.S. was 20 to 30 years ago, China is beginning right now! As a result, we're presented with a perfect opportunity to invest in a cash-rich brokerage service that is poised to use its leading position to capitalize on the major consolidation I expect the industry to soon face.

The relationship between Australia and China can seem strained, but I have no doubts that the trade between the two countries will only grow in importance in the future. So, I'd like to discuss with you some of the reasons behind the Australia/China tension, as well as exciting investment opportunities there and why I'm bullish on each country for the next decade.

We've often talked about how China's $586 billion stimulus package was vital to the country's quick recovery from the global slowdown -- and it also primarily benefited Chinese state-owned enterprises. But now the Chinese government is turning its attention to the country's small- and medium-enterprises. I'm excited about the proposal and the effects it will have on China's economy, including job creation and the continued spread of China's recovery.

The media is clamoring about a potential trade war between the U.S. and China -- especially since the Group of 20 nations meet this week. But so far the tariff on tires and China threatening an investigation into chickens and auto parts, is fairly negligible. So I don't think investors need to worry overly much. However, it does emphasize why export-dependent companies are not our best investment bet in China right now, rather we'll continue to focus on companies taking advantage of the rising Chinese domestic consumption and infrastructure investment.

Now, September is notorious for being a weak period for stocks -- but so far the global markets are holding up well. And China stocks are leading the way, along with the Shanghai A-Share market. What's helping China continue to lead the way? Well, they're regularly reporting economic data that points to a strengthening economy, confounding critics. The latest good news is an unexpected expansion in new lending and a faster-than-expected increased in industrial production.

China has surpassed Germany as the world's largest exporter -- and it looks like exports in China may be again rising after nine months of decreases. However, while this news is nice, we've been profiting from China's domestic consumption -- the real driving force behind China's amazing economic recovery this year. And I expect the Chinese ability to spend will only grow in the future. There's still time to gain from China's economic emergence.

A crippling drought in China has left millions without water, as well as severely hurting crops and farmland. And the area and number of people affected are on the increase as the drought spreads due to blistering temperatures and no rain. At China Strategy we're investing in a company in the water treatment and purification industry that will literally save lives, as well as helping against future droughts in China.

China has been on a worldwide buying binge -- snapping up natural resources left and right. And one of my Asia Edge recommended companies just completed the largest foreign takeover bid that China has ever seen. That, coupled with the hot automotive market and rising demand for gasoline makes this company a sure -- and profitable -- bet.

I've been pounding the table about the bull market opportunities to be found in China's real estate market -- and I hope you've been listening. Real estate prices are soaring in major Chinese cities, and my readers at China Strategy and I have been taking advantage -- and one of my favorites just reported blowout earnings, which pushed the stock higher. I don't want you to miss out on the next leg up, because this one's poised to go higher, much higher. In fact, they're expecting 100% year-on-year growth next quarter!

The U.S. employment numbers are improving, but far too slowly. That's why the better investment opportunities are in China, where we can take advantage of the employment trend. Shares have already popped 70% in the seven weeks since I recommended this profitable opportunity! Don't miss out on the next leg up!

India is typically the first thing that comes to your mind when you think of IT outsourcing. But you might want to rethink -- China is seeing explosive growth in the outsourcing industry and I smell opportunity. Shares in my recommended company are already up 250% year-to-date! Don't miss out!

More cooperation and stronger bonds will define the relationship between the United States and China in the future. The talks this week in Washington D.C. have led to much agreement and an understanding that the world's economic woes are better fixed together. I think it's vital that both economies work hand-in-hand in solving the financial crisis -- and the U.S. couldn't do much better in picking a future partner as China is the only large economy still growing.

Emerging markets are simply exploding this year. The numbers are red-hot: the MSCI Emerging Markets Index just jumped to a new 10-month high on Monday. And, of course, it shouldn't be a surprise to my regular readers that China is driving much of the leap. The bold steps that China has taken to overcome the effects of the global financial crisis are definitely paying off. Funds from the $586 billion stimulus package and record-setting bank lending are flooding the markets with liquidity. You definitely don't want to miss out!

China is officially the first global economy to turnaround. The nation's gross domestic product grew 7.9% in the second quarter, accelerating from its slowest growth in almost a decade. China is now on track to surpass my 7% GDP projection for 2009, and China's economy is the only one of the world's 10 largest that is still expanding. And since the Chinese government isn't cutting back on spending anytime soon and China's economy will continue to grow going forward, Chinese stocks will likely rally throughout the rest of 2009.

The talks between Chinese steel mills and the world's second-largest mining company, Rio Tinto, are finally making some progress. China's steel mills had demanded a price cut of 45% but many are now accepting a temporary price cut of 33%. However, the negotiations have been overshadowed by recent events -- four Rio Tinto employees were detained in China on charges of stealing state secrets. The four are accused of bribing steel mill executives in order to gain an edge in the contract negotiations.

China is taking bold steps to overcome the global financial and economic crisis, which are not only spurring economic growth, but they're also creating jobs. Just this week the steel, automobile, finance and transportation industries announced their intent to hire more employees in response to revitalization plans. Real estate, hi-tech and retail are also increasing their hiring. This will all greatly benefit a company I recommended just three weeks ago that's already popped more than 28%!

Every time world leaders met recently they've started with a debate about whether the dollar will -- or should -- lose its dominance as the world's reserve currency. It's clear the "almighty dollar" is weakening. However, don't panic yet. The dollar isn't going anywhere immediately. But, China is making sure it has options for a future where the greenback no longer dominates -- recently allowed the first yuan cross-border transaction. Don't miss out as China continues its rise against the U.S. in the world markets.

The Chinese are taking steps to better their health care system with a recent update to the $124.4 billion medical reform plan. The plan aims to provide universal health care to the countries' 1.3 billion population by the year 2011. I expect businesses within the health care sector to receive a nice boost within the coming months, resulting in some incredible opportunities to be created for investors in China.

The World Bank's projection for the global economy, as you know, sent global stock markets spiraling lower earlier in the week. Many of these markets bounced back later in the week, including Japan. Despite the Japanese stock markets rebounding, I still believe that Japan is still suffering from a deep recession that will last through this year and into 2010 -- a fact that will likely weigh on the country's stock markets.

With expendable income expanding nicely in recent years, more and more Chinese are taking vacations to some of the hottest tourist destinations in China and all of Asia. This likely includes visiting the terra cotta museum in Xian, touring the capital city of Beijing and gambling in Macau. And like many Americans, the Chinese are turning to the Internet to book their flights, hotels and rental cars. China's leading online travel services company has been the biggest beneficiary of this trend -- shares are up nearly 80% year to date.

China's National Development and Reform Commission lifted gasoline and diesel prices on Monday to reflect the jump in oil prices since the beginning of the year. Crude oil is now trading near $70 per barrel. The move higher and the boost to retail prices bodes well for this Chinese offshore driller, which is already up 50% year to date.

Earlier this week, we received more positive news out of China that reaffirmed my projection that the Chinese economy is bouncing back and on track for a full recovery in the second half of the year. China's manufacturing sector expanded for the third straight month, with a PMI reading over 50. And following this encouraging report, China's benchmark stock exchange in Shanghai added another 3%.

For more than 2,000 years, China has celebrated the life and patriotic efforts of Qu Yuan during the Dragon Boat Festival. This celebration is held throughout the Greater China Region as boat races are launched in China, Taiwan and Hong Kong. And it has been a popular tradition in the region since the Warring States period, or third century BC.

After the tumble that most real estate markets around the globe took, I know it's hard to believe that any of them are on the verge of a turnaround. But considering the Chinese economy and the influx of bank lending occurring there today, China's real estate market is on track for a turnaround. And there are two great ways to play this rebound. My two China Strategy recommendations -- a Chinese developer and a Chinese real estate services company -- are directly in line to profit from this trend are up nicely this year -- 182% and 73%, respectively. Learn what's fueling this rebound and how you can start profiting today.

One of the hot topics in the technology sector this year is the U.S.'s switch from analog to digital transmission. What's interesting, though, is that other countries around the globe are also making this move. In fact, the Chinese government announced a mandate to broadcast all TV programs in digital format by 2010. This is creating an incredible investment opportunity in China's TV market.

There's no denying that the financial crisis wreaked havoc on China's exporting business. As a result, the country has focused it's economic growth efforts inward, rather than outward. And part of this plan includes developing central China, which has lagged behind in economic growth compared to China's coastal cities.

While all eyes have been on the U.S. in recent weeks paying attention to how the economic superpower responds to the global financial crisis, another economic power is gaining ground -- China. In fact, a recent report states that China is set to become t he second-largest economy by 2010.

Last week, China's central bank governor Zhou Xiaochuan proposed a creation of a new currency to replace the U.S. dollar as the world's main reserve currency. Zhou said that it would create and control global liquidity. The idea of a global currency has come and gone in recent years in tandem with global economic woes, but will it actually happen this time? Read on to find out.

Last week, the Chinese expressed their concerns about the safety of U.S. Treasury securities. China holds many of these securities, and is worried that they may be negatively affected by the U.S.'s financial crisis. The U.S. responded with reassurance that the country that they are indeed safe. So what is in store for these securities and China's investment in them? Read on to find out.

The U.S. government recently implemented a huge stimulus package to help support the U.S. economy. But investors are still worried that this stimulus may not be enough to prevent the U.S. from slipping into recession, which was shown in today's stock market losses. So as investors in a global economy dominated by the U.S., I recommend that we steer clear of this economic turmoil, and instead focus our investments on China.

It is no secret that 2009 will likely be tough for the global markets and economy. Many investors would rather turn their backs on investing than take a risk in this environment. So in this rough investment landscape, I have recommended that my subscribers invest in this hedge.

Since the implementation of China's $586 billion economic stimulus plan, there are many companies that are starting to benefit from its implementation. One of these companies is China's leading producer of aluminum and alumina, as the plan will give a huge boost to improve China's infrastructure. This company is set to grow this year, making it a solid investment for us.

The history books were being written today as Barack Obama was welcomed the 44th President of the United States. But what kind of role will the new administration play in overcoming the global financial crisis and economic recession in the U.S.? Only time will tell... Still I have a few expecations for the new administration that I'd like to share with you today.

No kidding! The recent announcement that the U.S. has been in a recession all year shouldn't have come as a big surprise this week. In fact, I've been telling my Asia Edge and China Strategy subscribers just that for the better part of 2008. Still, the global markets didn't react positively to this news, and we saw another sell-off after last week's four-day rally.

In recent months, governments around the globe have announced plans to help their countries weather the global financial storm and economic slowdown. The U.S. and Japan both introduced economic stimulus packages recently, but China's $586 billion plan is, so far, the largest of its kind. And it's set to truly rejuvenate economic growth in China.