Due to recent economic news, prices have fallen for Chinese securities.
The exchange traded fund for China, iShares FTSE China (NYSE: FXI), is off by nearly 14 percent for 2014. China Mobile (NYSE: CHL), the biggest cell phone company is the world, is down more than 14 percent. PetroChina, (NYSE: PTR), a major oil and natural gas company based in Beijing, has fallen more than 10 percent for that same period.
For the long term investor, this is an opportunity to buy Chinese blue chip securities at discount prices.
At present, China has more purchasing power than any other country. It also imports and exports more than any other nation. China has the highest savings rate in the world along with more foreign currency reserves than any other county. The People’s Republic of China posts a huge trade surplus every month, adding to its hard currency assets.
For the future, the policy of urbanization will do much to increase economic growth in the country. According to Carl Weinberg, Chief Economist at High Frequency Economics, stated in an interview in Barron’s that each person who moves from the country to the city increases gross domestic growth by 600 percent for the People’s Republic. Beijing just announced a new program that will bring 100 million more into its cities.
iShares FTSE China, China Mobile, and PetroChina are excellent ways to profit from the economic growth of the world’s most populous country.
As an exchange traded fund, iShares FTSE China offers a broad investment with a diverse portfolio of holdings. China Mobile will gain from the growth of the consumer class in China. Many other articles on this site have detailed the appeal of major oil and natural gas firms like PetroChina. With its ties to the country, PetroChina is even better situated to benefit from the growth of the country.