rlirph

11 Reasons Why It's Time to Invest in China and 5 Ways to Play It

Most people forget that China lives on exports. When the economy of US and Europe declines China has farther to drop.

As to the Chinese shares selling at 8x earnings we have to deal with transparency and accuracy. In addition analysts here and in the US are alike - look at how much cheaper US stocks are now - but they have not marked down the more realistic earnings. When one factors in the 'real' earnings stocks in US and China are no longer cheap. I like to see specific examples to show how many company's earnings are increasing and not decreasing.

Because the Chinese have traditionally saved 40% of their income when the economy contracts the consumers are the first one to defer buying. Just look at their automobile sales in 2008. The sales figure has hit a wall long before the US did.

Locals so far are somewhat optimistic because they still have jobs. When more jobs are eliminated in Southern China (called Pearl Delta, the Shenzhen-Guangzhou-Zhu... triangle) which is happening now those optimism will fade fast.