Don't Miss Our Opportunity in South Korea

Robert Hsu, October 13, 2009

I've just returned from a fact-finding mission to mainland China, Hong Kong and Taiwan -- and there's no denying that China's economic growth is spreading throughout Asia. In fact, while there, I made several observations about China's spillover effect into the region.

For just a few examples: Taiwanese hotels were filled with Mainland Chinese tourists. China's state-owned enterprises are buying up empty offices in Hong Kong. And South Korea is experiencing record export levels due to selling electronics and other goods to China.

Now, I've been cautious recommending too many investments outside of China so far this year because the risk was too high for the reward. Plus, despite China's robust economic growth, I felt the financial crisis had taken its toll on Asia and I didn't expect China to be able to pull the rest of the region from their economic doldrums.

However, as I observed on my recent trip and as I was expecting, nations with direct ties to China have been benefiting from the economic strength there. Hong Kong continues to benefit from Chinese investment and tourism, while Singapore is profiting from selling more and more exports to China. Aside from Hong Kong and Singapore, though, I think one particular country is benefiting particularly well -- South Korea.

South Korea is the first East Asian economy outside of China to recover from the global recession. In fact, South Korea's economy expanded 2.6% in the second quarter -- the fastest pace in nearly six years. And looking forward to 2010, the country forecasts 4% economic growth, with a long-term goal of 5% expansion per year between 2011 through 2013.

The faster-than-expected pace of recovery that the country has experienced is largely due to the quick reaction by the South Korean government to the steep downturn last year. The government devalued its currency, the Won, and used stimulus measures similar to China's stimulus package. Devaluing the Won stimulated exports, and due in part to enormous Chinese demand, as well as recovering demand from the U.S. and the rest of the world, South Korean companies are experiencing robust gains.

Due to the turnaround in South Korea's economy, I recently recommended a play on South Korea to my Asia Edge readers. Because South Korea is dependent on exports and benefiting from Chinese and global demand, I expect their economy to continue its robust pace as a slow recovery spreads throughout the world.

And my recent Asia Edge recommendation -- a South Korean steel company -- is directly in line to profit from this enormous demand due to massive infrastructure growth in China, as well as the booming auto market in China -- now the largest in the world. Don't miss out on the incredible profits to be made in this South Korean play or the vast opportunities that Asia will be offering in the months ahead -- join Asia Edge today!

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