Could China’s economy and exchange traded funds (ETFs) be faltering like some think? Perhaps not. One sign: sport utility vehicle sales are taking off.

Two of the fastest growing segments in the Chinese market, in fact, are luxury cars and SUVs, reports GM China’s vice president for sales and marketing. Analysts are expecting auto sales growth between 15% and 20% this year, reports Joe Mcdonald for the Associated Press.

Demand for the behemoths of the road and luxury vehicles is expected to grow by 40%-45%. China’s economic growth has topped 10% for five consecutive years, and a spike in real estate and stock prices has created some freshly minted billionaires looking to spend.

The Chinese don’t have to worry about the price of gas, either: pump prices have been frozen, and they’re among the world’s lowest.

While wealth is spreading in China, the country needs to remain vigilant about inflation, Reuters reports. Prices for food and other products are rising, and consumer inflation is running near 12-year highs. Food prices alone rose 21.4% from January to March this year.

China’s ETFs have lost much of their huge gains from 2007. A turnaround for this country is eagerly awaited.

  • iShares FTSE/Xinhua China 25 Index (FXI), down 13.7% year-to-date
  • PowerShares Golden Dragon Halter USX China (PGJ), down 22.1% year-to-date
  • SPDR S&P China (GXC), down 16.7% year-to-date


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.