Outside of those exchange traded funds (ETFs) that go short, China ETFs were the only ones in the positive column last week. Since 1990, China’s economy has been expanding rapidly, averaging an annual average growth rate of almost 10%. At the end of 2005, China overtook the United Kingdom to become the fourth largest economy in the world by nominal gross domestic product (GDP); after the United States, Japan and Germany. Over the past five years, China has contributed a yearly average of around 13% to the worlds economic growth, as stated in the People’s Daily Online.

Success comes at a price, and China’s environment has paid the price. Pollution and large energy consumption have posed a threat to sustainable development. Balancing international payments is also a goal of the governments as well as implementing prudent monetary and fiscal policies next year. Looking forward to 2007, the economic strategy is a sign that the Chinese officials are realizing economic growth as  a whole and not a short trend. The China ETFs are:

  • iShares FTSE/Xinhua China 25 Index (FXI)
  • PowerShares Golden Dragon Halter USX China (PGJ)


For full disclosure, some of Tom Lydon’s clients own FXI.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.