The following chart shows the contributors to China’s growth and the composition of its imports over the years:
Click to enlarge
Source: World Economic Outlook,Oct 2012, The IMF
Investment expenditures accounted for about half of China’s GDP in the first decade of 2000 as China invested heavily in infrastructure development. As China builds up its infrastructure and the urbanization process continues investment will continue to a key driver of GDP growth.
China’s machinery imports have been declining while the import of metals and minerals have been steadily rising. This shows that the country is increasingly dependent on the growth of domestic valued-added high-end manufacturing. This shift in China’s import has a profound impact on the major exporters to China.
Related ETF:
iShares FTSE/Xinhua China 25 Index Fund (FXI)
Disclosure: No Positions
Thousands of companies trade on the US exchanges. However only some of them are worth investing at any given time. In fact, some of these companies should never be listed in the first place. But they do trade for some reason. Hence for investors willing to invest their hard-earned money in the stock market, the toughest part is to identifying the stocks they want to invest in and the ones they want to avoid. In an earlier post I listed five stocks to consider for potential investment.
