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China Stocks Set for Big Profits in 2008
From Inside China Dispatch by Robert Hsu
The post holiday sales rush is still going strong making this the busiest time of year for shopping malls across America. Shopping centers around China are also experiencing the rush, getting busier and busier each month.
That's why I believe consumer stocks are where to be in the China stock market in 2008. Chinese consumers are now reaping the benefits of the new strength of China's economy, and now that they know what it's like to live in luxury, they certainly won't settle for less. The New Year just started, but I am already prepared to make some predictions: Chuppies (the "yuppies" of China) will lead China's 1.3 billion consumers in a virtual consumer-surge, boosting China's economy and growing the Chinese domestic consumption by 12% in 2008.
Chuppies: The Biggest Boost for China's Stock Market
Getting a piece of China's consumer market has been a goal of European and American businesses since the time of Christopher Columbus. Lewis and Clark's famed expedition across America is a prime example of the lengths early Americans went to in hopes of finding the best access to China.
However, we're just now discovering that China's economy is more than just a market to tap for their goods; China's purchasing power is awesome and continuing to grow at a rate of more than 10% per year. That's been true for the past seven years. But this year, 2008, is the year when Chinese consumer spending will really take off.
And Chuppies will be doing much of the spending. Last year, I told China Strategy subscribers that Chuppies will be the next driving force in global consumption. They will be picking up the slack in spending left by American Baby Boomers as the oldest boomers turn 62 this year and start retiring. With this many retirees, the economy of China (and the rest of the world), could suffer a major blow, but there are over 75 million Chinese people in middle-class households (many of them Chuppies) who want to live the good life, and have the means to do it. They are happy to fill the consumer shoes of the Baby Boomers.
There are two major catalysts that make me confident 2008 will be the Year of the Chuppie. First, the development is credit card and other forms of consumer banking are finally emerging in China. Frances, China Strategy's consumer trends analyst in Shanghai, has gone from having just one credit card in 2006 to having four cards now in 2008. Chinese consumers spend only 5% of their money on credit vs. an incredible 60% spent on credit by Americans. This includes everything from mortgages, to credit card debt to student loans, etc.
The other catalyst that I'm sure will drive consumer spending in China's economy (and drive China's stock market way up!) is the continuing and rapid appreciation of China's stocks and real estate. Real estate prices in China have more than doubled in the last five years and China's stock market has more than tripled in the same amount of time. Last year, the price of property jumped again while the price of Mainland A-Share stocks exploded, going up by 90%! Because of this, Chuppies by the millions have seen their net worth increase dramatically in just a few short years. More money means more purchasing, and that means only good things for China's market.
In you want the names of the best China stocks, especially consumer stocks, click here and find out why The Year of the Chuppie means a good year for everyone who invests in China stocks.
Four Ways Profit from Hot China Stocks in 2008
Beverly Hills' Rodeo Drive and New York's Fifth Avenue will be packed this year with Chinese tourists venturing to America with money to spend. Those retailers who realize the buying power of the Chinese consumer will make big money, and I'm recommending a number of companies poised to benefit directly from this new wave of traveling and shopping by the wealthy Chinese.
If you want to take advantage of this trend in consumerism, you have to invest in four companies in the best position to "win" in this market:
The first is an online travel company used by Chinese citizen to book all of their travel plans. The next two companies are U.S.-based, but have become the hot ticket for those Chinese travelers looking for a uniquely American way to spend their money. The final company is another Chinese enterprise: an advertising company that is booming right now as Chinese producers are scrambling to get their products in front of these Chuppies and other big spenders in China. All told, these four companies have performed amazingly well, showing 187% gains in the China Strategy Portfolio.
With the Chuppies at the helm, 2008 is bound to be packed with big trading profits when you invest in China stocks.
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