China appears to have avoided a much-feared ‘hard landing’ via aggressive interest rate cuts, heavy infrastructure spending, and a climate of promoting consumer spending to drive GDP growth.
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New York, NY (PRWEB) November 29, 2012
In a recent Investment Contrarians article, editor George Leong reports that the most recent evidence of the economic reversal in China was an expansionary HSBC Flash Purchasing Managers’ Index (PMI) of 50.4 in November, the highest reading in 13 months. (Source: “China’s manufacturing growth quickens; HSBC flash PMI at 13-month high,” Reuters, November 22, 2012.) According to Leong, while the index needs to continue to deliver positive readings, it’s a good start, and it suggests that the Chinese economy and the country’s gross domestic product (GDP) growth are mending, on their way to better times ahead.
“China appears to have avoided a much-feared ‘hard landing’ via aggressive interest rate cuts, heavy infrastructure spending, and a climate of promoting consumer spending to drive GDP growth,” states Leong.
Leong reports that China’s industrial production surged 9.6% in October, up from 9.2% in September, while the key retail sales reading showed sales increasing 14.5% in October versus 14.2% in September. (“Data shows Chinese economy expanded in October,” China Economic Review, November 12, 2012.) Leong adds that in another positive reading, the country’s trade surplus of $32.0 billion in October represented a four-year high. (“China trade surplus hits four-year high,” China Economic Review, November 12, 2102.)
Leong notes that come March 2013, China will see a change in its political leaders with the new President Xi Jinping and Premier Li Keqiang.
“To say these are not exciting times for China is an understatement, as this could be a special decade for the country,” says Leong. “For China, the change at the helm comes at a critical juncture, as the country is attempting to turn its economy around following years of explosive GDP growth…”
However, the Investment Contrarians expert notes that this time around, the difference will be the country’s focus on increasing domestic consumer spending to drive GDP growth, and rely less on the global economy.
Leong concludes, “…the golden years for the country that will drive GDP growth are actually still to come.”
To see the full article, and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing, and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work, and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.