Unless you have been in a cocoon, you most likely know that China will in all chance become the subsequent economic superpower on the planet. The country's economy is on steroids, growing at close to double digits over the past few years and this isn't predicted to change.
And if you understand the huge size of the states commercial engine, you would also understand that China is a place where you must have some capital invested. Naturally, at the same time, you also have to fully understand the chance factors associated in investing in a country where the economy and corporate structure is exactly under the control of the communist-led government.
The concept of an open economy in China is subject to question as there is the incessant threat of govt. intervention at any point to suit the political agenda. Yet the danger is probably guaranteed given the vast expansion opportunities which lie in the country for both multi-national companies and investors hunting for some diversification outside of their borders. This region of the world will become the next big boom in commercial expansion so long as the Chinese govt is prepared.
A report just published by the Development Research Center of China's State Council guesses the country will report GDP expansion of about 8% yearly from 2006 to 2010. Based primarily on the numbers we've been seeing, this figure looks to be reasonable.
The report guesses that China's GDP primarily based on 2000 costs will hit USD$2.3 trillion by the end of the current five-year period in 2010.
In the successive 10-year period from 2010 to 2020, the report works out a fall in the annual GDP rate of growth to around 7%, which is still quite respectable.
For backers, the approximate numbers are stunning but then China must be able to manage any inflationary and growth-related issues going forward as the country becomes richer.
The states middle class of a few hundred million robust is booming as residents move from the country to the towns in pursuit of occasions to increase their wealth.
As Chinese subjects make more cash, they become even more consumption driven. This in turn pumps up the demand for both foreign and domestic good and services. That?s why we are seeing such a mass flow of companies into China looking for expansion prospects.
The bottomline is you must be in China at some specific point. In the future commentaries, I will examine some of the key Chinese stocks trading as American Depository Receipts (ADRs) in the U.S.
And if you understand the huge size of the states commercial engine, you would also understand that China is a place where you must have some capital invested. Naturally, at the same time, you also have to fully understand the chance factors associated in investing in a country where the economy and corporate structure is exactly under the control of the communist-led government.
The concept of an open economy in China is subject to question as there is the incessant threat of govt. intervention at any point to suit the political agenda. Yet the danger is probably guaranteed given the vast expansion opportunities which lie in the country for both multi-national companies and investors hunting for some diversification outside of their borders. This region of the world will become the next big boom in commercial expansion so long as the Chinese govt is prepared.
A report just published by the Development Research Center of China's State Council guesses the country will report GDP expansion of about 8% yearly from 2006 to 2010. Based primarily on the numbers we've been seeing, this figure looks to be reasonable.
The report guesses that China's GDP primarily based on 2000 costs will hit USD$2.3 trillion by the end of the current five-year period in 2010.
In the successive 10-year period from 2010 to 2020, the report works out a fall in the annual GDP rate of growth to around 7%, which is still quite respectable.
For backers, the approximate numbers are stunning but then China must be able to manage any inflationary and growth-related issues going forward as the country becomes richer.
The states middle class of a few hundred million robust is booming as residents move from the country to the towns in pursuit of occasions to increase their wealth.
As Chinese subjects make more cash, they become even more consumption driven. This in turn pumps up the demand for both foreign and domestic good and services. That?s why we are seeing such a mass flow of companies into China looking for expansion prospects.
The bottomline is you must be in China at some specific point. In the future commentaries, I will examine some of the key Chinese stocks trading as American Depository Receipts (ADRs) in the U.S.
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