Your Questions About How To Invest In China

Steven asks…

how do i invest in china fertilizer markets?

I love to buy sgares both in Fertilizes and Agric generally what are the names and share symbols of suggested companies
both in china US and Europe
thanks Raf

John answers:

Sinopec (NYSE: SNP) is the number one Chineese producer of fertilizers and urea.

China Petroleum & Chemical Corp.
A6 Huixindong Street
Chaoyang District
Beijing, 100029
China
Phone: 86 10 6499 0060
Fax: 86 10 6499 0022
Web Site: http://www.sinopec.com.cn

On the HGK (Hong Kong Exchange) available through E*Trade’s global trading platform:

China BlueChemical Limited
HKG: 3983, H shares
Three year profits up 118.1% Revenues up 71%

This is the fertilizer company spinoff from China’s only offshore oil company CNOOC (NYSE: CEO) and was an IPO in September 2006.

Daniel asks…

CHINA! How do you invest in china? And what areas are you allowed to invest in?

John answers:

Unless you are an institutional investor, there is no restriction on which sectors you can invest in.

Shares of many Chinese companies are listed on a number of exchanges outside of China such as NASDAQ, NYSE, HKSE (Hong Kong) and SGX (Singapore). In China, shares are traded on the Shanghai and Shenzhen stock exchanges and B class shares are available for non-Chinese to invest in. However, B shares are not very popular so the liquidity is very low.

Linda asks…

How many billion$ will China ultimately collect in interest for this latest loan of $1.2 trillion?

Where will China invest this FAT profit to overwhelm us even more with HER Xe?

John answers:

At 3%, China gets $36 billion and rising.

Mary asks…

How can China afford to keep its currency low?

If the demand for currency is high, its value appreciates. Demand for Chinese currency is high because it’s a net exporter. Yet how can they take the hit? Secondly what is the source of funds that China invests so heavily in infrastructure and manage to keep the labour,land and interest rate so low?

John answers:

(1) China has currency controls. It isn’t as if anyone who wanted to can go to China, bring in dollars, and buy yuan; similarly, Chinese aren’t free to use their yuan to buy dollars.

(2) China keeps the value of the yuan from appreciating by increasing supplies – it creates yuan and uses them to buy U.S. Dollars in order to keep the dollar/yuan ration approximately constant (an informal but real peg to the dollar)
http://www.nytimes.com/2010/01/01/opinion/01krugman.html

(3) China gets the money from its own people. The people as a whole are subsidizing the export industries. Personal consumption is around 35% of GDP, about half that in the U.S.
Http://delong.typepad.com/egregious_moderation/2009/09/martin-wolf-why-china-must-do-more-to-rebalance-its-economy.html

(4) Labor, land, and interest rates are NOT low.

If labor were still cheap, these export subsidies would not be needed. Chinese industry could compete without them. But because of the success and growth of the economy, wages have gone up faster than productivity, so without the subsidies, many industries would move elsewhere.
Http://www.csmonitor.com/World/Asia-Pacific/2010/0912/Vietnam-seeks-gains-as-China-labor-costs-rise

Land costs are rising so fast that most people see it as a bubble:
http://www.spiegel.de/international/world/0,1518,709688,00.html

And while the benchmark interest rate in the U.S. Is under 0.5%, that in China is now over 5.5%
http://www.tradingeconomics.com/

It helps to get your facts straight.

Lisa asks…

How do I trade stocks in Hong Kong and China from US?

I would like to invest in China‘s stock market. I’m currently living in US now. Is there a brokerage that allow me to do that?

John answers:

The easiest way is trading chineses’ ADRs at NYSE and NASDAQ. There are more than 40 companies listed there.

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