China’s new monetary control policy could affect exchange traded funds (ETFs) and related stocks. China is shifting its monetary control from "prudent to tight" in 2008. This is another attempt to keep their hot economy from overheating and should help stave off looming inflation.
Scott McDonald for Associated Press reports the decision was made at a closed-door economic conference, which the country’s Communist Party leaders held every December to draft policy for the coming year. Authorities have already raised interest rates and taken other means to curb lending and slow investment in shopping malls, factories and office buildings.
China’s economy is already expected to grow at 11.5% this year, and the government predicts a slight stunt next year at 10.8%. iShares FTSE/Xinhua China 25 Index (FXI) is sure to reflect any decisions made. FXI is up 16.7% since the market low on November 26 and 75.8% for the year.
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.