6 China Trends to Profit From in 2010

China Trend #6 – Expect ChineseReal Estate to Remain Strong

In China, real estate is a primary investment vehicle, and a store of value. So, property transactions and value move in direct correlation with the aggregate amount of wealth created. As a result, high-end real estate surged in 2009. But I now expect these prices to consolidate in first-tier cities like Beijing and Shanghai, while at the same time, growth shifts to second-tier cities that are home to more reasonable property prices.

Just consider that less than 3% of Chin’s total population lives in first-tier cities, while 40% of the country’s population lives in second-, third- and fourth-tier cities. So, we should see further appreciation in central Chinese cities, which will create big investment opportunities in companies in that cater to the Chinese real estate market in 2010.

And again, one of the best companies along these lines is the aforementioned Xinyuan Real Estate (XIN).