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Why China Will Shine in 2009

December 11, 2008

By Robert Hsu, Editor, China Strategy

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Robert Hsu

Robert Hsu

Robert Hsu is the founder and president of Absolute Return Capital Advisors LLC., a private client money management firm. His firsthand knowledge of Chinese culture, business and government combined with his phenomenal track record as an investor make him uniquely qualified to help you build your fortune from the economic miracle under way in China.

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…more funding for infrastructure spending, education and healthcare in the country. This stimulus package is just one path that China is taking to rejuvenate economic growth in the country. I'm expecting Chinese policymakers to stay focused on keeping China's economy strong with similar stimulus measures in the near future.  

In addition to aggressive action by the Chinese government, China's huge foreign account surplus and reserves — nearly $2 trillion — will allow the country to spend its way out of a severe economic slowdown and avoid a recession. Other nations around the globe won't be as lucky.

In previous financial crises, like the Asian Financial Crisis in 1997-98, China's economy was a regional force of economic stability, posting 7% to 9% economic growth. At that time, the country's ability to maintain the value of its currency and economic growth helped its Asian neighbors recover from the crisis more quickly. But this time around, due to the breadth and severity of the current economic crisis, it will be difficult for China to single-handedly bail out the rest of the world.

The country's combination of domestic spending and government-driven domestic investments should allow the Chinese economy to hold its own against a global recession, and in turn, create profitable investment opportunities. But it will be unable to provide much help beyond its borders. That's why I continue to think that China is the best place to be investing our money during these tough economic times.

Because of this, China has brighter days ahead in 2009. To be sure, there will be more bad economic news (such as more unemployment and a decrease in retail sales) in the U.S. in the coming weeks. But China's economy is ready to weather the storm and even outperform other countries.

In fact, we are already seeing evidence of this in the stock markets — Chinese stocks have out-performed American stocks in recent weeks. Since the global market bloodbath on October 27, the Dow Jones has gained only 9%, while Hong Kong's Hang Seng Index has jumped a whopping 37%!

I'm expecting this type of decoupling to continue through 2009. And that's why it's so important to have a China Strategy right now, so that you can profit from China's resistant and growing economy in 2009.

America's bungled bailout means new profits opportunities China right now, and you couldn't ask for a better time to get started. Join China Strategy risk-free today to learn the best ways to profit from China in the New Year!