Don't Overlook China's Economic Achievements

By Robert Hsu, Editor, Inside China Dispatch

Recently, more than 100 of my subscribers and I visited five cities in China and stopped for a quick visit in Osaka, Japan. What an experience! I greatly enjoyed traveling with my subscribers and witnessing first hand the astounding changes that are occurring in the region.

What I saw on this trip reaffirmed my belief that China will be the center of global economic growth this century. Preparations for the Olympic are underway and Beijing has made impressive improvements in its infrastructure, cleanliness and general receptiveness to visitors during the past year and a half. These major changes in this short amount of time prove to me that China is working very hard to grow into a responsible and respectful member of the global community.

Should you invest in China?

Unfortunately, Western media has largely ignored these sweeping improvements. Instead, the media has featured the riots in Tibet, and ultimately missed the root cause of the riots. It wasn't religious freedom or even human rights. It was about higher food prices.

The poor people of the world are having a much tougher time adjusting to $11 for a bushel of wheat than oil at $110 a barrel. So the protests may have started with a few hundred monks protesting China rule, but they grew violent as thousands of angry low-income Tibetans joined the riots. Interviews with Tibetans who participated in the riots revealed that a majority of the rioters joined in because their lives are getting harder with higher food prices and stagnant income.

This bad press has placed a dark cloud over the Beijing government. In reality, though, most people outside of China do not realize how popular Chinese president Hu jin-tao and premier Wen Jia-bao are in their home country. These leaders have taken great strides to improve their country. China's economy grew by nearly 60% during the past five years, and most Chinese are far better off today than anytime in the past.

Concentrate on the country's significant economic achievement, not the current bad public relations situation. It is important not to get distracted by the media on the Tibet situation or China's economic picture. As an investor, you need to realize that the riots in Tibet and related protests won't have any impact on China's overall economic advancement. (Tibet contributes less than 1% of China's GDP.)

The Tibetan riots, however, are related to one of the most important investment themes of our time--the global bull market in agricultural commodities. In fact, my top agricultural play is up 60% in the last six month's despite the market's recent volatility. To learn more about my top agribusiness play that is profiting from the growth in China and the strength in commodities, join China Strategy today!

Beijing's Top Priority

Since China is so focused on economic growth, it sits at the top of my investment strategy. I firmly believe it is one of the best investment opportunities of our time. I prefer to invest in countries with governments that make growing their economy a top priority, instead of simply redistributing wealth. The Chinese have learned through incredible suffering that wealth redistribution led by the government simply makes everyone equally poorer. The only ones who profit are the politicians who led the charge.

China's continuing success is largely attributed to its commitment to economic growth. Today, China reported its first-quarter GDP numbers for 2008. Influenced by the global economic slowdown, China's GDP slowed to 10.6% year over year in first quarter from 11.7% year over year in the fourth quarter of 2007. The softening was mainly driven by slower growth in net exports, which is related directly to the current U.S. recession.

Aside from the slow-down in exports, other segments of China's GDP, including industrial production, retail sales and capital investments, all continued to enjoy strong growth. This confirms my prediction that the U.S. recession will only have minor effects on China's economic growth this year. I expect the country to still enjoy growth of around 10% in 2008.

Join China Strategy today to find out the best way to profit from China's massive growth today.

by Kim Stup |  04/21/08