China's Robust Third-Quarter GDP Results

Robert Hsu, October 22, 2009

The Chinese recovery is moving along at record speeds. 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.

That's because expectations are still high for a strong second half of the year. In fact, China's third-quarter GDP results rolled out today and clocked in just as expected. 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.

This good news puts the county right on target to meet its 8% year-end goal for economic growth. And China's GDP for the first three quarters of the year now exceeds 7%, and could possibly rise to 9% for full-year 2009.

What's fueling this robust economic growth? China's four-trillion yuan ($586 billion) stimulus plan, which was introduced last November. The plan has aided in pulling the country out of economic instability, and it continues to keep the recovery on track. What's even better is that the plan is not going away any time soon either.

With the world economy still on the rocks and some of the policies from the stimulus plan not yet implemented fully in the Chinese economy, the plan is set to keep the money flowing and the economy rocking for the foreseeable future. In fact, China's robust growth from 2009 will likely carry over into 2010 allowing for faster growth. There is also no sign of major inflationary pressure in 2009 or 2010.

Despite China's economic strength this year and projections for a solid 2010, some investors are still concerned about the country's prospects. This is mainly because foreign trade has experienced some negative effects recently. The total value of imports and exports is still below last year's numbers, down 10.1% from September 2008. But I think this is less of a threat to the current economy considering that the rate was up 14.2% from August to September 2009. Plus, domestic consumption and investment continue to play a much bigger role in China's GDP growth than exports.

So, China's robust economic growth should continue to support the Chinese markets and Chinese companies' shares. And that's a trend you can't afford to miss out on. To learn how to start profiting from China's economic strength, join China Strategy today!

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