Your Questions About How To Invest In China

Sandy asks…

What did the Chinese Govt do to have attracted the Foreign Direct Investment to China 26% more than last year?

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Comparing to the first 4 months of last year, the Foreign Investment to China has jumped 26% ( US$ 38 billions ) , which will no doubt continue to create jobs for the Chinese people.

Can anyone tell me, by what strategy has the Chinese Government applied to keep the Foreign Investments growing steadily like now, so to be able to supply more jobs for the Chinese people and more revenue for the country ?

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John answers:

By keeping the populous poor. With a poor populous the cost of living and stuff is much cheaper and hence foreign companies get more bang for their buck.

What you don’t understand is with more jobs going and the shrinking working population due to the one child polity is that it will start to drive wages and prices up plus making it less profitable to invest in China they will start to look elsewhere. Well in fact more companies are starting to move out of China.

Dell and hover are some brands that build factories elsewhere in the world rather than China due to it becoming more profitable.

Mark asks…

How do Chinese people feel about the scrutiny China is under?

China has allegedly gained 4th economic power status on earth. Due to their population, they have largest troop on earth.

However, China is under lot of scrutiny and criticism in all level:
– They were practicing high birth rate because they thought they can rule the world with high Chinese population.
– They are several generations behind Russia and America in military and scientific development.
– They have to act like a super power if they want to be one.
– Are they really that powerful?
In case of military conflict, China‘s neighbor India has more than sufficient military prowess and nukes to send China to Yin Yang ashes and dust. Most Americans believe India is more than capable of swiftly and surely defeating China, and ruling China as its colony.
– Overall, China is behind, and will be behind for very very long time.

There’s got to be some truth in such criticism, and there are other criticism about China.
How do Chinese people deal with the put downs coming from the rest of world about their country?
True. English is the universal languge, but not because it’s better than any other languages. I’d have to disagree on that.
English has become the universal language due to British dominance followed by American dominance.
All languages are equally good and valid.

John answers:

I’m Chinese, I grew up in the US, I go back ocassionally to visit family and whatnot.

– They were practicing high birth rate because they thought they can rule the world with high Chinese population.

That’s not true, it was like that about 50 years ago. That’s why they practice the one-child policy in the big coastal cities. And in a way, it’s kind of working. How many Chinese are in the US? Probably not even 2% of the US population. And what colleges do they go to? The good ones. And good colleges provide what what? Good jobs = usually money.

– They are several generations behind Russia and America in military and scientific development.

That’s actually not true. China keeps a lot of this stuff hush-hush. China’s actually quite adanced technology wise. A stroll through Shanghai can prove that. Their mobile phone industry is much more advanced than it is here. Also, there are a lot of things there that I don’t find here (car elevators, public portable showers–big giant metal thing, very clean, machine automated, like a car wash for people, quite cool–, etc.)

It’s also quite well known that China’s been focusing their attention on science and technology. They’ve also been focusing on strengthening science education. I can definitely see this, all of my cousins in China all rave and complain about their rigorous and strong science classes.

– They have to act like a super power if they want to be one.

Well, they are a super power, or at least a developing one. And they’re acting quite well.

– Are they really that powerful?

Yes. I don’t think people in America understand exactly how important China is to the well-being of the world…especially the US.

– In case of military conflict, China’s neighbor India has more than sufficient military prowess and nukes to send China to Yin Yang ashes and dust. Most Americans believe India is more than capable of swiftly and surely defeating China, and ruling China as its colony.

That’s not known actually and definitely not true. China has officially said its military budget, which is quite small. But they have been spending an enormous amount of their budget on unknowns, which most believe to be the military. Also, India has only recently gotten nuclear weapons. China’s had them for a while.

If India does get that hostile that it attempts to do that, none of the other countries would approve, including the US.

– Overall, China is behind, and will be behind for very very long time.

That’s not true. The British scholar Segal said that like 10 years ago. And it hasn’t happened yet.

Basically…

-If China falls, the US is going to be hit pretty badly. China has invested a lot of money into the US as well, and they’ve bought a significant amount of bounds. Plus, since the US and China (and China and the world) are so interconnected economically, you do not want China to fall.
-It’s in the US’s best interest to keep the light on themselves and off of other countries.
-I find that a lot of things are really quite over-exaggerated here. Like censorship in China. I went to China recently and I could get onto all of the websites (except for freetibet.org, lol) easily.
-Your question’s extremely biased and you seem to have already made up your mind about the subject.
-China’s doing a lot of things that the US is going to regret not doing (Africa, Middle East, etc.)
-Why doesn’t China want to lose Taiwan or Tibet? Because no country wants to lose land. Think of what the US will do if Alaska or even Hawaii wanted to become independent. Would the US let them go so easily? Hawaii’s big on tourism and tropical fruit. Alaska’s got resources. Would the US really want to lose them? Same idea. One of a country’s top priorities is to keep land.
-The mainstream media in the US isn’t so uncensored. Who controls the media? (Hint: Not the people.)
-What happened to the Native Americans? Slavery?
-Iraq is going very very well and Bush is doing a great job. (Sarcasm).
-Hurricane Katrina was a success.
-When that huge tsutnami hit Asia, China responded IMMEDIATELY by sending provisions and stuff. They were there immediately to help out the worst hit countries and the tsutnami didn’t even effect China’s mainland much. How long did it take for the US to respond to the tsunami? To Katrina? Very long, and Katrina was on American ground!!!!
-America may be powerful, but they’re not very well liked. I travel all over and I’ve learned that in a lot of situations, saying that I’m American is not a good idea.
-Chinese people do know about their history: the Cultural Revolution, Tiananmen Square, etc. They know that Mao wasn’t exactly great. They know that the T-Square Massacre was a pretty sh*t thing to do, but they like China because of how much the government has been able to fix their problems, etc.
-Chinese is not a hard language to learn. Loads of people are learning it right now.
-America glosses over tons of things: Korean, Vietnam, Christopher Columbus, slavery, Gulf War, etc. America has also never won a war in Asia.

Last words: 2008 BEIJING!!!!!!!!!!!!!!!!!!!!!

There’s a lot of other things but I’ve gotta go to work.

Carol asks…

is now a good time to invest in China?

Is now a good time to invest in China, perhaps in an ETF such as PEK? Would it be better to wait to see if the currency rises in value?

John answers:

Yeah..wait..

“Wall Street ended a five-week winning steak on Friday as the threat of rising interest rates in China prompted investors to book profits and reassess bullish positions in equities. Investors worried tighter credit in China would curb demand for commodities, driving down energy and natural resource stocks. The two sectors were the biggest drag on the S&P. Reuters Messaging: ”

http://search.cnbc.com/main.do?keywords=China&sort=date&minimumrelevance=0.2&pubtime=0&pubfreq=h&categories=exclude&page=2

Sandra asks…

What is the best company to invest in on the stock market right now?

This is for a project in my econ class. I am theoretically going to be investing $10,000 split into 5 or more seperate companies on the NYSE. I want something fairly stable but with a good potential of going up (obviously). I am trying to make the most profit over the next three months– there are extra credit points at stake! I’m just starting to learn about this stuff, so I need advice from someone with more substantial experience in this field. Thanks!
i can only make 60 trade in 3 months
and i have already bought yahoo, Exxon Mobil, and other oil company, and the last i bought Hershey.

John answers:

I would go with 2 closed end mutual funds for the dividends, 2 growth stocks and 1 really speculative play….
You did not say if you had to hold these stocks for the 3 months….or how often you can trade…or if the money has to be split evenly ….

Assuming that you have to hold these for the duration
peo, ifn, iaf, cee, rne, usa, gre, gim
for the dividends….and some growth
sndk, mu, hnsn, goog, appl, vod, nok
for growth…[no or negligible dividend]

china mobile, china telecom, china ..china …china for the possibility of explosive growth…but ONLY if you can trade out out them at any time….they are very speculative and can dive just as fast as they climb….

If you cannot trade out….
Igt, lm, jnc, jns, trow, lm, geo, utx, txt, cx

good luck

Daniel asks…

How can I find an Angel investor to invest into my company?

I have a pet shop in Hong Kong and would like to expand into China. China has the fastest growing “pet economy” in the world and has a lot of potential. But I need additional funding to grow.
How can I present my proposal to the potental angel investors?

John answers:

Word of advice, you shouldn’t look for an “angel investor” there’s nothing angel about them. But I would suggest building a good business plan, and heading a good reliable bank with lean terms for a loan.

Your answer could be found here, check the following links:
http://www.inc.com/guides/start_biz/24011.html
www.angel-investor-news.com
www.businesspartnerships.com
www.ventureworthy.com/

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