ETF Trends
ETF Trends

The Chinese government may have enacted some self-imposed austerity measures, but its economy is still expanding at an impressive rate. Despite any negative impact it might have on China exchange traded funds (ETFs), the country’s leaders believe that fomenting slower growth is the right thing to do. But let’s define “slow.”

The Chinese economy expanded 10.3% in the second quarter, compared to an increase of 11.9% in the first, reports Sharron Lafraniere for The New York Times. Inflation fell to 2.9% in June, which is below the government’s target of 3%. Economists were largely in agreement with the slower growth, arguing that property prices needed to be brought down to realistic levels. [China ETFs: Why They’re Not Running Scared.]

Industrial output increased by 13.7% in June year-over-year; however, that number was down from the 16.5% increase in May year-over-year. If growth slows too much, there is the possibility that lower Chinese demand for raw materials would suppress commodities prices and threaten the total global recovery.

Sheng Laiyun, spokesman for the National Bureau of Statistics in China, commented that “a slowdown will benefit the economy because it will prevent it from growing too fast and being overheated,” according to UPI.

Furthermore, Laiyun remarked that the slowdown will help the country with the country’s economic restructuring, writes Stephanie Ho for VOA News.

The latest growth numbers indicates that China is poised to surpass Japan as the world’s second-largest economy. [Which Way Is Up for the Yuan ETFs?]

For more information on China, visit our China category. Searching our ETF Analyzer for China ETFs and sorting by assets, the four largest ETFs are:

  • iShares FTSE/Xinhua China 25 (NYSEArca: FXI)
  • SPDR S&P China (NYSEArca: GXC)
  • PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ)
  • Claymore/AlphaShares China Small-Cap (NYSEArca: HAO)

Sorting by performance, most China ETFs are in the red for the last six months. Only Global X China Consumer (NYSEArca: CHIQ) and Global X China Financials (NYSEArca: CHIX) are up, by a scant 0.1%.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.