Today, the World Bank cut its 2008 economic growth forecast for China to 9.6%, down from 10.8%, according to Joe McDonald for the Associated Press. The bank says that the chaos resulting from the snowstorm in the country shouldn’t have too much long-term impact, but it has disrupted trains and trucking in the southern part of the country. Perishable goods prices are expected to rise.
Larger factors, the bank says, are a possible economic slowdown in the United States, which could hurt the country’s large exports sector. Consumer demand among China’s own population is expected to remain strong.
The bank also warned that China still faces some other problems while it tries to manage rapid growth and control inflation, which so far has been limited to food.
China’s ETFs have been having a rough time the last few months. After seeing a 54.8% return in 2007, the iShares FTSE/Xinhua China 25 Index (FXI) has lost 11.6% year-to-date and 26.8% over the last three months. The PowerShares Golden Dragon Halter USX (PGJ) has seen similar performance: year-to-date it’s down 15.7%, and in the last three months it’s lost 22.2%. It ended 2007 up 63.3%.
They’re both dancing around their 200-day moving average. Will these funds get caught up in the storm, too?
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.