The Quiet Chinese Liftoff

The question of whether to invest in China is one that engenders many polarizing opinions. For every bull out there arguing in favor of a rebound in the Chinese economy and stock market, there are an equal (perhaps greater) number of bears proclaiming that China’s economic data cannot be trusted and that the country is destined for a massive debt explosion that will end up crushing the global economy.

Without getting into every detail of the bull vs. bear debate on China, I will say that I think that there are good points to be made on both sides. In the bull camp, China is unquestionably the second-largest economy in the world, with a burgeoning domestic middle class that has a voracious appetite for all sorts of consumer goods literally from around the world. In the bear camp, China has done a lot of infrastructure building, such as those infamous “ghost towns” where much of the real estate still waits for occupants.

For now, however, let’s put the pro and con arguments aside and look at something that gives us a more objective take on China, i.e., let’s take a look at the price chart of the biggest stocks in the Chinese equity market, the iShares FTSE China 25 Index Fund (FXI).

Read more about how the Chinese market quietly rose at Eagle Daily Investor.