Secrets To China Investing
The question of how much the China economy is growing is an important one for the entire globe. Because all our economies are global now, changes in one will necessarily affect the others. China stocks are going up.
The GDP in China is experiencing a growth rate of about 10% annually. One concern about the growth is that, as China buys up natural resources, it may hurt other countries by limiting their access. In any case, controlling natural resources always has global influence.
When considering the strength of a particular economy, one measure is not enough. In the case of China, you can also look at the ratio of government debt to that growing GDP. For China, this ratio is only 20%. Especially when you compare this to the same ratio in the U. S. Which is 60%, you can appreciate how much stronger this makes the Chinese economy.
The current concern for China is that the rising economy will cause some of the same problems that we have seen in the West. That is, that consumers will end up over extending themselves in credit and buying beyond their means, thus creating a bubble. This could potentially end in the same kind of economic disaster that is currently being experienced elsewhere, especially in the United States.
Another concern is a viable market for all the goods being produced in China. With the current economy in the West being down, there is not the same market for Chinese goods as there had been. For China to continue its growth, it needs to have a market for its products as well.
For the United States, this is important because China holds more American debt than any other nation. If they decided to sell all the bonds held, the American economy would be devastated even further. However, this would result in even less importing from China.
For now, one can definitely say that the China economy is growing and shows no signs of stopping. How long the growth can continue will be partially dependent on the strength of the global economy as well. - 23223
The GDP in China is experiencing a growth rate of about 10% annually. One concern about the growth is that, as China buys up natural resources, it may hurt other countries by limiting their access. In any case, controlling natural resources always has global influence.
When considering the strength of a particular economy, one measure is not enough. In the case of China, you can also look at the ratio of government debt to that growing GDP. For China, this ratio is only 20%. Especially when you compare this to the same ratio in the U. S. Which is 60%, you can appreciate how much stronger this makes the Chinese economy.
The current concern for China is that the rising economy will cause some of the same problems that we have seen in the West. That is, that consumers will end up over extending themselves in credit and buying beyond their means, thus creating a bubble. This could potentially end in the same kind of economic disaster that is currently being experienced elsewhere, especially in the United States.
Another concern is a viable market for all the goods being produced in China. With the current economy in the West being down, there is not the same market for Chinese goods as there had been. For China to continue its growth, it needs to have a market for its products as well.
For the United States, this is important because China holds more American debt than any other nation. If they decided to sell all the bonds held, the American economy would be devastated even further. However, this would result in even less importing from China.
For now, one can definitely say that the China economy is growing and shows no signs of stopping. How long the growth can continue will be partially dependent on the strength of the global economy as well. - 23223
About the Author:
For more on China and investing in emerging markets click here to receive our Bric nations report.
posted by X - Men @ 8:56 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home