Friday, December 21, 2007
China: What the future holds
The fiscal projection for 2008 is bleak with an anticipated US recession and export slowdown; domestic asset price deflation; and monetary tightening as well as anticipated austerity controls, but experts believe corporate China will cope very well in the next twelve months. Whilst overall growth is expected to slow down in 2008 China's economy will continue expand according to informed authorities. Investors are being warned against reliance upon export-dependent and cyclical sectors such as textile, machinery and electronics as well as those industries linked to the US recession such as banking, insurance, materials and real estate sectors. Instead concentration should be given to domestic sectors based on consumer demand such as retail, and telecom which are now considered to be blue chip for 2008. One example cited is the footwear company Anta Sports Products Ltd (association with Houston Rockets)which is thought by many to record strong sales at least up until the Beijing Olympics in August. Slowdowns in economic activity did follow both Tokyo and Seoul Olympics but many experts believe being ‘fore warned is fore armed.’ Another Chinese company thought to improve its fortunes over 2008 is Fujian Peak. Recently the Milwaukee Bucks announced a multimillion dollar partnership with the Chinese shoe manufacturer. Interests in The Bucks has sored in China since the team signed Yi Jianlian to a contract.