Your Questions About How To Invest In China

Mark asks…

How can the US work better with our Western neighbors as well as Eastern?

China is investing heavily in the West now, in Cuba, Venezuela, Chile, and Brazil. The US has often had conflicts with Western governments trying to influence their politics, how can the US instead become more supportive of our Western brothers?

John answers:

The US well of support has been abused and is now dried up.

Sandy asks…

How have the Chinese government acheived their PR coup?

The Communist government of China isn’t known for it’s great human rights, freedom of speech etc.

So how have they managed to get the developed world to cast a blind eye to all this and invest heavily in China?

John answers:

Cheap labor and a HUGE growing market.

You would also like to know that the almighty dollar follows cheaper resources, which is why some manufacturing jobs have actually left China and moved some where else.

From an economic standpoint, stopping FDI is not the answer to get China to improve it’s HR record. Continued investment is the answer. The more economic freedom the Chinese enjoy, the more they’ll want Religious and Political freedom.

Maria asks…

How to invest China Stock Market and Funds? Any reliable online broker?

I would like to know how How to invest China Stock Market and Funds? Any reliable online brokers?
I learn only chinese can buy chinese stocks. For foreigners how?
is there any online broker like TD Ameritrade, e-trade something like that?

John answers:

Actually there are quite a few Chinese stocks that you can buy. It is true that there are some Chinese stocks that only Chinese can buy. I believe they are called A shares. There is even a mutual fund that just recently started that invests only in A shares.

Among the Chinese stocks you can buy at TDAmeritrade, etc. Are CHL, PTR, TOMO, CEO, LFC, SNP, CN, CTRP, and about a dozen more.

There are as I mentioned mutual funds that specialize in Chinese stocks. Among those are CHN, TDF, GCH, JFC, and last but not least the China A fund CAF.

Laura asks…

Invest China or the countries that feed its growth?

I saw this ad for Morgan Stanley :
400 million people in China will migrate from the villages to the cities.
Do you invest in China , or the countries that feed its growth?

John answers:

This is especially interesting for me as I specialize in stock investments specific to The Republic of China.

Morgan Stanley is probably hoping to stimulate interest in U.S. Investment options for investors. Advertising is a tool used for that purpose, not to disseminate newsworthy information.

Some of my holdings at present include:


BSPM and LTUS are businesses in the pharmaceutical sector. They operate primarily in China but are quickly expanding into other Asian countries.

CNOA and CKGT are in the agriculture industry but are broadening their footprint by moving unconventionally into other areas as well. For example, CNOA owns vineyards producing wines in California. CKGT just began selling cactus-based cigarettes (two varieties) in Q4 of 2009 and the two products are off to a surprisingly profitable start. The company also manufactures animal feed products and will soon be launching personal care product lines.

NEWN is a battery maker and supplier…now producing products for highest profile American OEM’s.

JADA is the world’s largest miner and supplier of highest quality jade.

These companies carry no long term debt and are poised to continue their upward trend. Some are incorporated in the US and are thus permitted to operate competitively on the Mainland of China. This is the case because American companies saw fit to merge with preexisting Chinese companies fallen on bad times. This is a process known as the “reverse merger” and is popular as it eliminates the usual two year wait foor SEC trading approval.

There is great opportunity for those willing to study Chinese stocks doing business successfully in that country.

I do not bother with ETFs as sector funds must perform as a group. I like that BSPM has handed me a gain (as of today—3/10/10) of 36%.

LTUS: 35.5%
CKGT: 129%
CNOA: 27.4%
JADA: 12% (just bought it last week)
NEWN: 13.5%

Investing in companies operating in China will outperform American companies based in the U.S. Because you don’t have to share profits with all shareholders in America—only with shareholders representing the China-based businesses.

I’m not recommending any of the aforementioned companies. However, I continue to add in all of them as cash becomes available for I’ve made a lot of money on them, taking profits routinely.


Sharon asks…

Do you think is good idea to invest in China?

I wanted to find is that a good idea to invest in China now? because of there so many people that become success after invest in China.
If yes on what I should be invested in.
If no why not.

John answers:

Investing in China is a very good idea. The catch to explosive growth is your dealing with a lot of variables. Unknown variables increases risk and potential loss of capital. (even though returns may be spectacular). Just a few of these risks are a virtually unknown economy, unknown culture, exchange rates, market sentiment, and a language you probably cannot read. In addition to all the variables mentioned above most companies (if you go to individual stocks) will have shares issued in Chinese, and some in English. Therefore a share price to company valuation will be dramatically disrupted.

I am not one to advocate loss of capital because it takes a 33% gain to recover from a 25% decline. You must take into account the 2008 Olympics are going to be held in China. The Olympics are encouraging a lot of the short term home growth in China and this will probably start fading in the next 6 months.

Here is how I would go about playing China if you still feel high prices and large amounts of unkowns and risk are something you cannot stay away from.
1) Look for an American play to China. Shipping of bulk goods, supplies, rail roads (Warren Buffet has been doing this for the last few years), manufacturing materials, or anyone that supplies building materials.
2) Buy multinational companies with partial exposure, but not fully 100% invested in the Chinese Market. A small hiccup could always occur and start a very bad trend you don’t want to be caught in.
3) Ask for professional advice to help you further research into the Chinese market.

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