Secrets To China Investing
The China economy is growing, and how much is a question of importance for every nation. All economies are now global so that changes in the economy of one nation will have an effect on all the rest and all eyes are on China stocks.
The GDP of China is increasing at a rate of 10% per year. Along with this growth, China has been buying up all the natural resources it can. There is concern that this is hurting other countries by limiting available resources. In any case, control of natural resources has always heavily influenced the global economy.
It is easy to throw out statistics such as a 10% growth rate. But one number never tells you the whole story. Another number to consider is that the ratio of the Chinese government debt to its GDP is a mere 20%. In the U. S., this ratio is over 60%. When you consider the debt ratio along with the growth in GDP, it makes the Chinese economy appear stronger.
There is some concern, however, that the growing economy in China could result in the same economic crises that we have been experiencing in the West. It may cause rising inflation as well as consumers extending their credit well beyond their ability to repay. The resulting bubble may create the same economic downturn experienced elsewhere right now, particularly in America.
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.
Suffice it to say that, at present, the China economy is growing and will likely continue to do so. For how long it can continue is going to depend, at least partially, on the global economy. - 23199
The GDP of China is increasing at a rate of 10% per year. Along with this growth, China has been buying up all the natural resources it can. There is concern that this is hurting other countries by limiting available resources. In any case, control of natural resources has always heavily influenced the global economy.
It is easy to throw out statistics such as a 10% growth rate. But one number never tells you the whole story. Another number to consider is that the ratio of the Chinese government debt to its GDP is a mere 20%. In the U. S., this ratio is over 60%. When you consider the debt ratio along with the growth in GDP, it makes the Chinese economy appear stronger.
There is some concern, however, that the growing economy in China could result in the same economic crises that we have been experiencing in the West. It may cause rising inflation as well as consumers extending their credit well beyond their ability to repay. The resulting bubble may create the same economic downturn experienced elsewhere right now, particularly in America.
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.
Suffice it to say that, at present, the China economy is growing and will likely continue to do so. For how long it can continue is going to depend, at least partially, on the global economy. - 23199
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posted by X - Men @ 2:42 AM
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