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Considerations on Investing in China

If China would adapt GAAP, the general market could go a lot higher especially if the audited statements came from reputable U.S./international firms.

This is something that Beijing has known for a long time and has still to get over the fear that the 'West' will know too much about the Chinese economy, especially companies with a government ownership component.

It will happen eventually, the question is when? When this does become the trend, especially for a serious number of mid-caps, then you will see the real boom.

For the time being the Chinese are saying that the rest of the world should rely on the Chinese system, but there is limited faith in how the current system works. The 'financial crisis' in the U.S. has sort of pushed things off a bit more into the future.

Previous highs were just the appetizer, the main course has yet to be served. This could take as much as eighteen months to begin to materialize. The exact timing is directly linked to actions from the centralized government...so it could change overnight.

Look for accounting transparency and credibility for the next wave. This was the one ingredient that was missing from the first. The rest of the necessary factors, as mentioned in the article, are in place.

consensus CrossProfit