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Why I Still Think You Need to Be in ChinaMany of you who read my columns know about my bullishness towards China along with Chinese stocks listed on U.S. exchanges, and this has not changed. China will continue to be the top growth engine going forward and, as I have always said, you need to have money there. Many global multinationals also know this. On Tuesday, General Electric Company (NYSE/GE), which is looking for business, announced that its oil and gas unit had won a three-hundred-million-dollar contract to do work on a new natural gas pipeline in China that will run east to west. The money being spent on infrastructure in China will be in the trillions of dollars and U.S. companies like GE want a piece of it. Whether it is roads, rail, ports, plans, oil, industrial, or technology, you cannot ignore the 1.3-billion people market in China and what will continue to be a price area for growth. The rise in the SCI demonstrates what I continue to believe is the top growth region in the world. Chinese stocks listed on U.S. exchanges have been struggling, but the valuations are attractive. The key is to have patience and to enter small positions so as to not risk too much capital. China will see a decline in its GDP to between six percent and seven percent this year, but estimates call for GDP to rise to around eight percent by 2010. The country is also developing its trade with neighbor India, which could potentially open up a market of over one billion people. India is growing fast and, like China, will need goods and services, as the countries' people become wealthier. Between the two countries, you have over 2.4 billion people or over a third of the world's total population. Could you imagine the market as disposable incomes in both countries accelerate upwards? That is why you need to be in China. China and India are trying hard to expand trade, which was a mere $38.7 billion in 2007, but is expected to reach $60.0 billion by 2010 now that a bilateral pact has been signed. The bottom line is that China is a key component of the global economic machine and will only grow. Goldman Sachs estimates that China will be the world's largest economy by about 2040. I believe that there are good buying opportunities in Chinese stocks, specifically of the small-cap variety. I also believe that Chinese stocks listed in the U.S. will continue to represent an excellent area for growth investors. However, you also need to be careful and be diversified in your portfolio, as there could be more downside risk. The key is diversification. Profit Confidential --- http://www.profitconfidential.com/ LOMBARDI PUBLISHING CORPORATION News, Analysis, and Information Services Since 1986. One Million Customers in 141 Countries. Lombardi Publishing Corporation Financial Publications Division 350 Fifth Avenue, Suite 3304 New York, NY 10118-3304 --- Copyright 2008; Lombardi Publishing Corporation. All rights reserved. No part of this e-newsletter may be used or reproduced in any manner or means, including print, electronic, mechanical, or by any information storage and retrieval system whatsoever , without written permission from the copyright holder. Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHORGeorge Leong, B. Comm., Senior Editor at Lombardi Financial, has been a technical analyst for 12 years and a financial analyst for seven years. His overall market timing and trading knowledge is extensive. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. He has written technical columns for stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as an analyst with Globe Information Services.
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