Investors had long been anticipating the impact of the Olympics upon China’s economy, but after all is said and done, the results may only be negligible, for the country and related exchange traded funds (ETFs).
Chi Lo for Business Week reports that the total Olympics-related spending in the last four years only accounted for an average of 0.3% of China’s total GDP each year.
Beijing would have to be an economic powerhouse for it to influence national economic growth. But as it is, Beijing’s population is only 1.1% of the national total. There has also been no spillover effect on investment outside Beijing.
In better news, though, retail spending in China is expanding at the fastest pace in nine years, and July proved that China’s growth was strong even as prices climbed.
Paul Panckhurst and Nipa Piboontanasawat for Bloomberg reports that sales rose 23.3% to 869.2 billion yuan ($126 billion) after gaining 23% in June. This was more than analysts anticipated.
But will that all be enough to put China on the growth path again?
- iShares FTSE/Xinhua China 25 Index (FXI), down 26.9% year-to-date
- SPDR S&P China (GXC), down 31.3% year-to-date
- PowerShares Golden Dragon Halter USX China (PGJ), down 31.9% year-to-date
- NETS Hang Seng China Enterprises Index (SNO), down 18% since May 22 launch
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.