China ETFs: The Shift to Domestic Consumption | ETF Trends

The developed Occident is seeing growth at a crawl, but China’s economy is one exception. The country’s exchange traded funds (ETFs) are shooting skyward, thanks to a shift in domestic consumption.

Joel Backaler for Forbes asked Oxford University Professor Karl Gerth about consumerism in China. Gerth says China’s market is emerging as a premier destination for multinational corporations, while Chinese companies are developing into global name brands that will soon compete with established international brands. [China ETFs: Plays for the World’s No. 2 Economy.]

China’s government is moving toward domestic consumerism by implementing policies designed to attract greater consumer demand, which will make more Chinese realize the convenience of Western styled products, adds Gerth. For instance, the Chinese rich have already started to break away from traditional styles of saving and are driving the luxury market in China today.

The Chinese property market is in the world’s biggest bubble, rising at 20% a month in some regions this year, writes Gordon G. Chang for Forbes. Residential real estate prices surged 68% in the first quarter year-over-year and up 12.2% in the second quarter year-over-year. Still, some don’t believe the bubble is going to burst anytime soon, with vacant apartments held by speculators valued at 15% of GDP. But just in case it does, have that exit strategy ready.

For more information on China, visit our China category.

  • iShares FTSE/Xinhua China 25 (NYSEArca: FXI)
  • SPDR S&P China (NYSEArca: GXC)
  • Claymore/AlphaShares China All-Cap (NYSEArca: YAO)
  • Claymore/Alpha China Real Estate (NYSEArca: TAO)
  • Global X China Consumer (NYSEArca: CHIQ)

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.