Archive for December, 2008

The Biggest Boom Enters 2009

A new year is fast approaching and the greatest economic expansion in human history is still underway. The Chinese Economic Miracle is exactly thirty years old and China Stock Digest subscribers are certainly a part of the profitable New Year’s celebration.

Just thirty years ago Chinese leader Deng Xiaoping received final approval to begin a series of market reforms that transformed the world’s most populous nation (and altered the world order forever). China’s capitalist revolution has vaulted a once-impoverished nation from the bottom of the economic heap to become the world’s number two economy.

Even the rise of the United States did not happen as quickly or as smoothly. For three straight decades the economic expansion of China has averaged 9.8% growth per year. And even now, as the world reels from the effects of a global financial crisis, China is still on a powerful economic growth trajectory.

For investors who believe in selecting expanding economies, China is the only remaining choice among the world’s majors. As a trading nation, China has leapt from 27th place to third in the world. Its trading surpluses with the U.S. have exceeded those of Japan.

When it comes to liquidity, China is a model of solvency compared to the United States. China’s banks are increasing their profits by double-digits while financial institutions in the rest of the world continue to hemorrhage money. China has amassed the world’s largest trove of foreign currency with almost two trillion dollars in reserve.

On the anniversary of Deng’s revolution and the start of a new year, China is less of a communist and more of a capitalist state than the United States. Spending on health care is just 1.8% of GDP. Education gets just 2.5% of Gross National Product. That’s just a fraction of U.S. social spending.

What does a 9.8% average growth expansion amount to in real terms? It means China’s gross domestic product has increased 69-fold since Deng Xiaoping began his free market changes in 1978.

China is now the world’s banker and its economic engine. Chinese trade accounted for a remarkable 27 percent of global growth last year.

Keep some of these facts in mind when your consider how to allocate your investments this year. The Chinese economic revolution is still very much underway and it is open to the world of global investing.

The U.S. still faces economic contraction in the coming year. The simple fact is: China does not.

Committed to your PROFITS from China,

Jim Trippon,

Editor in Chief
China Stock Digest

P.S. The Buy Alerts Are Coming
Stay tuned for new buy alerts. Two new stocks ready to bring explosive profits in the New Year.

P.S.S. It’s Here And It’s GENIUS!
I have been promising the launch of a new newsletter. It is here and ready to go. Be on the look for the smartest way to earn profits, REGARDLESS of the economy!

This is Jim Trippon with your China Market Commentary for Tuesday, December 23, 2008. China stock markets were down today with investors shell-shocked over the $1.3 billion dollar deal between two Chinese media giants, Focus Media (FMCN) and SINA Corporation (SINA). In nutshell, SINA has purchased the very core of Focus Media’s business and paid for it with newly issued stock.

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As China stock Digest subscribers may recall, SINA is one of China’s largest web portals, much like Yahoo in the United States. Focus Media is an advertising conglomerate that primarily sells space on its brightly lit animated signs in shops, elevators and inside high-end buildings. Focus does have other advertising outlets but the so-called out-of-home advertising business was biggest part of the company’s revenue stream.

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In our view Focus Media has made a poor deal. Following a top management shuffle several months ago and consistently disappointing returns, we have serious doubts about the company’s viability. The company has already terminated another revenue stream, its wireless advertising which was a kind of “SPAM” broadcast to cell phone users.

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Both Focus Media and SINA lost more than 15% on North American Markets yesterday on news of the deal. The reason for Focus Media’s loss is clearly an investor perception that the company has lost another core revenue stream and the firm will never achieve its stated aim of becoming the largest advertising business in China. The company’s stock has plummeted almost 90% this year.

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We see a brighter future for SINA. As one of China’s largest web portals, SINA has demonstrated increasing ad revenues while Focus has been losing focus and business.  Why did shares fall on the acquisition from Focus Media? Part of the reason is that the deal was paid for with newly issued stock and investors are clearly worried about a dilution of their holdings.

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But Sina has successfully established its presence in China’s explosively expanding web universe. With the purchase of a revenue-generating business, SINA now owns a new mature advertising business that reaches out to the consumer when he or she is on the move. SINA can use this asset to generate cash and increase consumer awareness of its Internet dominance.

Focus Media has repeatedly missed earnings targets and may sell other portions of its business.  As our premium subscribers know, we removed Focus Media from our model portfolio a long time ago.

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This entire episode reinforces what we have been saying for years. There is absolutely no substitute to having analysts on the ground in China to help you avoid the challenges in this still rapidly emerging market. Next week, we release our January China Stock Digest issue in which we make many predictions for the year ahead. Until then, I remain…

Committed to your PROFITS from China, Jim Trippon, Editor

China Stock Digest

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For additional information on investing in China and Jim Trippon’s China Stock Digest, please visit us at ChinaStockDigest.com.

Stocks on American exchanges jumped over 5% today after the U.S. Federal reserve took interest rates to near zero, in a near last ditch effort to resuscitate the U.S. economy. Although the investment world applauded today’s move with huge one day gains, I have to ask the question: What next?

Remember that low interest rates do nothing to revive the economy if banks refuse to lend. So far, banks have taken the low interest taxpayer money under the TARP program and used it to speculate in risk free Fannie Mae bonds. How exactly does this help the consumer, home owner or small businessman crushed by the recession?

The answer is it doesn’t.

That’s why the euphoria from today’s interest rate move is likely to be short lived. What’s worse, today’s rate cut means the U.S. Federal Reserve is now out of options. It has, if you will, shot its last bullet.

Of course the economic situation is the U.S. is far worse than what we see in China.

While The U.S. Economy Slows, China Grows

China’s retail sales managed to maintain their fast growth last month despite a widespread contraction of consumer demand in some other countries. China’s National Bureau of Statistics says retail sales grew 20.8 percent last month. That’s one very impressive gain in an economy that is supposedly tied to US consumer demand. Beijing is doing all it can to stoke the fires of consumer spending. Part of China’s recently announced government stimulus program was a subsidy to help poor rural families purchase new household appliances.

That seems a lot smarter to me than what is being done in the U.S., Namely, rewarding the same corrupt bankers who brought down the U.S. economy.

This brings us the question I get constantly these days. China Stock Digest readers ask me: With all the positive news from China, why do we still have such large cash reserves in our model portfolio?

The Bottom Line

One thing that has been very clear this year is that China’s markets remain heavily coupled to the US stock indexes for general direction. We still believe the low for this bear market has not been reached in the US. As you know, we have stayed in cash most of this year.

If you purchased the stocks I told you about in late October, and then sold them when I sent my sell order to subscribers on November 12, 2008 you should have made profits of between 9% to 42% on those trades.

I am projecting the low for the US markets to be hit sometime in the first quarter of 2009. You will be seeing quite of few China buy orders then. In the meanwhile our China portfolio will stay heavy cash.

If you have not yet subscribed to China Stock Digest, you are missing out on some great profit opportunities. To subscribe, Order Here!

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Committed to your PROFITS from China,

Jim Trippon,

Editor in Chief  China Stock Digest

Who can blame investors for being skittish during times of economic turmoil. Lately they have seen stock market volatility swings of hundreds of points within a single day, and financial entities like Bear Stearns, Lehman Brothers and Washington mutual dissolve. Such chaos can make it difficult to stay focused.Â

The United States’ financial system breakdown has been an enormous cause of the change. Not only has the Stock Market seen devastating losses, but the U.S. economy has fallen into a deep depression which may be for an extended period of time. The last time the U.S. housing market had this many pending foreclosures was during the Great Depression. Worldwide markets have followed the U.S. in its spiraling downturn.

It’s a small wonder that head of China’s sovereign wealth fund says he has lost the confidence to invest any part of his nation’s mountain of foreign reserves in U.S. banks. As he put it, he didn’t have the courage to invest in the U.S.

BANKING ON CHINA

It was just a short time ago when China’s banks and its infant stock market were not taken seriously. How have the times changed. China’s banks can now look down from their seat of strength on their western counterparts.

Louis Kuijs of the World Bank office in Beijing remarked, “We feel China’s financial system and its banks are, in relation to the chaos in the U.S. and other parts of the world, relatively shielded from those problems.”  Kuijs’ comments on China’s exposure to the global financial crisis are kind. Shielded in an understatement.

ICBC, Industrial and Commercial Bank, China’s largest commercial bank did hold $151 million of of Lehman Brothers, half a billion dollars in collateralized debt obligations, $1.9 billion in structured investment vehicles. ICBC, practically wrote them off, stating that they were near-worthless and only represented 0.55% of ICBC’s total assets. The bank has relatively few bad mortgages since Chinese borrowers are required to put down up tp 40% on real estate purchases. Third quarter ICBC profits were up by 25.5%.

As China’s Premier, Wen Jiabao explains, “The financial system is sound and safe…we have full confidence in China’s economic development and financial stability.” Chinese financial institutions have great risk management and have grown stronger during this global financial crisis.

AMERICA’S BANKER

During China’s thirty-year economic explosion, they have managed to mass the largest foreign reserves the world has ever seen. With a mountain of over two trillion dollars in foreign reserves, China has the resources to maintain its internal economic growth despite the slowing of exports to other countries. The economic stimulus package announced in November, earmarked part of the $586 billion dollars to infrastructure development. This mountain of cash gives China’s leadership a sense of security to avoid the economic chaos of the rest of the world.

Even more important to the United States is the fact that China has now officially taken over the number one spot as America’s banker.

As the graph shows, China’s holding of U.S. debt has steadily increased over the past several years. According to U.S. treasury records, China has passed Japan as the largest foreign buyer of U.S. Treasuries of $585 billing, and it is steadily increasing. The Chinese government realize that they hold most of the cards in the U.S. – China financial relationship.

In 2006, U.S. Treasury Secretary Henry Paulson began to fly to Beijing periodically to “teach” the Chinese the proper way to run their economy and stock exchanges. Paulson explained that the Chinese were failing to grow and secure its nation’s stock exchanges due to the hesitation to embrace derivatives. Again, how times have changed. Paulson found himself as the student in a recent visit to China. Central Bank Governor Zhou Xiaochuan told Paulson that the U.S. need to begin to take account for its huge trade and fiscal debts. Americans should be more like the Chinese and begin saving more and rely less on credit. America’s financial problems stem from over-consumption. A blunt remark by China’s Vice Premier, Wu Yi which some think of as a threat, he said that America should, “take all necessary measures to stabilize its economy and the financial market to ensure the security of China’s assets and investments in the U.S.”

Vice Premier Wu is warning us that China might stop financing U.S. debt and stop investing in America. As the saying goes, “He who pays the piper calls the tune.” For the first time, Beijing is calling the tune for America and telling us to get our financial act together or else.

IS CHINA IMMUNE TO THE GLOBAL CRISIS?

Since China relies heavily on exports, the Chinese economy is beginning to feel the effect of the worldwide financial crisis. Some major factories have closed leading to employee demonstrations. China’s GDP growth is slowing, and financial news outlets are reminding the Chinese people that exports are declining. But how serious will the effects be?

To understand China’s economic growth, you must look at real data. Financial news headlines and the media state that China’s exports are declining. But are they? Not at all. As you’ll see in the graph below, both China’s exports and imports have been increasing steadily except for the month of February when a freak blizzard shut down much of China’s economic heartland.

The rate of export growth is what is slowing due to western economies slowing.  China’s actual export growth rate was up 19.2% in October of 2008, the latest statistic at this writing. What needs to be reported is that China’s economy is showing incredible resilience in the midst of worldwide recession. China’s trade surplus jumped an incredible 20% in September of 2008. Part of the reason for China’s increasing trade surplus is a relative decline in imports to the Chinese mainland. Any further weakness in China’s economy will be reflected by a drop in demand for imports, a trend that once again puts China in the driver’s seat.

China’s exports are not the true life blood of their economic growth. Chinese economist state that exports only account for a quarter of the nation’s total economic activity.

Zhou Shijian, a senior researcher at Tsinghua University, recently told China Business News that Chinese enterprises were able to overcome weak overseas demand because China’s exported products are mostly “daily necessities with low elasticity of demand.” Demand from emerging markets remains strong, and Beijing is increasing tax rebates to keep China’s products competitive in less developed countries.

CHINA’S STOCK MARKET CRASH?

The Shanghai Stock Market has fallen almost 70% from its all time high of 2007. The Shanghai Stock Exchange (SSE) did begin its slump prior to the decline of the western stock markets. That’s because stocks listed in Shanghai were grotesquely overvalued by any standard measure such as P/E ratios as China was caught up in a retail investor bubble. The SSE has since corrected itself and stock are no longer overvalued. Reports of Chinese companies with double digit growth has not yet been reflected in their stock prices. Galaxy Securities of Beijing says the average price earning multiple for stocks traded on the Shanghai Exchange is now 16.02. Valuations of Chinese ADRs are also at a low due to intense volatility on U.S. stock exchanges.

Galaxy also reports that earning are anticipated to grow by 7% in 2009, and 15% in 2010. Cash rich Chinese companies are looking to buy up foreign assets.

• China Life, the world’s biggest insurer by market value, says it wants to buy parts of AIG.
• PetroChina, Asia’s biggest oil and gas producer, says it may buy some overseas companies badly hurt by the global financial crisis.
• Industrial & Commercial Bank, China’s largest commercial bank, says it aims to double its assets outside China within three years.

THE TIPPING POINT

China’s contributions to world economic growth are now comparable to those of the United States according to UN Under-Secretary-General Sha Zukang. The most resounding declaration of China’s growing importance comes from the International Monetary Fund’s chief economist, Olivier Blanchard who says one hundred percent of global economic growth will come from emerging economies including China. As the world’s biggest emerging economy, China is central to that process.

As IMF economist Blanchard told an Italian newspaper, “There will be a shift in power. China will emerge from these events in a stronger position.”

China is not yet the world’s largest economy, but China’s influence is starting to challenge the global dominance of the United States.

By Jim Trippon
Editor-in-Chief
China Stock Digest
Http://www.chinastockdigest.com

For more information about the China Stock Market and the booming China economy, please visit ChinaStockDigest.com. China Stock Digest is Dow Jones’ #1 rated China Stock Market Newsletter whose model portfolio returned 58% in 2007. Visit ChinaStockDigest.com to receive a free report titled: Secrets New China Investors Need To Know

Are you wearing this name tag?

I know that you are probably thinking that it is ridiculous for me to tell you to invest in the stock market right now. If you read any headlines, the observation that most amateur investors would make is that it is the worst time to get into the China Stock Market. However, let’s compare headlines:(these take from various news websites on December 10, 2008)

So which looks more promising? In December’s issue of China Stock Digest, I made the statement, “The Chinese economy continues to grow at a rate that would make Western economies green with envy.” You don’t see this in the mainstream media. You see doom and gloom get your attention. I am here to help you shake the investment doom and gloom blues, and make some huge profits in the China Stock Market.

I am not saying that China has not been affected by worldwide economic volatility. China’s rate of growth has definitely been hampered by the recessions of Europe, Japan and the United States. But China’s growth story continues, and the Chinese government is absolutely determined to continue the nation’s thirty year economic expansion.

 Compared to the United States, China’s economy is going in exactly the opposite direction. With a world-beating growth-rate, still running at 9.9%, Chinese companies are reporting double and even triple digit increases in income during the most recent reporting quarter. “China is Merrill Lynch’s favorite emerging market for 2009 as the Asian country will account for 80 percent of the world’s economic growth.” (Bloomberg.com)

Our China Stock Digest subscribers have noticed a more conservative strategy of investments in the China Stock Market as of late. The typical buy-and-hold strategy does not always apply in a time like this. As we’ve seen, a lot of money can be made on investments amoung hugely profitable Chinese companies. My third quarter sell alert earned an average of 28% (the range was from 9% to 43%) on just a ten day hold. We’re very pleased with that call because it pulled our subscribers out of the market literally hours before a plunge in the U.S. indexes dragged down world share prices.

So where do you find a safe harbor?.

Timing Is Everything! That is an old saying that holds true in just about every avenue in life. The time and accuracy of my research in the China Stock Digest sets it light years ahead of our competition. Dow Jones rates China Stock Digest as the No. 1 China stock market newsletter in the world. Our model portfolio earned 58% returns in 2007. We outperformed our nearest competition by OVER 100%! Check out how we compare below:

Show Me The Money!

You are a smart investor, right? I bet that right now you are saying to yourself, “Sure that was 2007, but what about this year?” Well, I have already shown you the third quarter earnings of up to 43%, let me share with you some additional numbers.

Some of you recently requested China’s Top Gaming Stocks & China’s Top Green Energy Stocks. In these two reports, I researched stocks that we at China Stock Digest believe are poised to extend big gains.

One of those plays is CTrip.com Int’l, China’s leading online travel service. Air ticketing leapt 21% from the same quarter a year ago. Ctrip.com delivered double digit revenue increases in its recent third quarter report.

Suntech, the solar module maker, reports third-quarter profits up 4.9%. Suntech’s third quarter 2008 total net revenues grew by 53.7% year-over-year.

What else are we watching?

• A bank  pick that aims to double its assets outside China within the next three years.

• A China bank with little exposure to U.S. assets losses, Fannie Mae or Freddie Mac.

• Cellular service provider who added 7.2 million NEW subscribers in October of 2008.

• A gaming stock that doubled its revenue intake in the most recent quarter.Â

  So why jump without a parachute?

  Have you ever thought about skydiving? If you were to take up the sport, which teacher would you rather learn from:

  • The teacher with mediocre reviews, no hands on training, and poor results from its students.

  • Or would you rather learn from a highly recognized teacher, with many testimonials from students, and a proven track record for success.

So what are you waiting for? Christmas?

Well, you are in luck! China Stock Digest has put together the ultimate China stock market investment package.

  2008 China Stock DigestÂ
Holiday Investment Package:

This package has never been offered before, and is only available for a limited time. This package includes all you would need to begin successfully investing in the world’s fastest growing economy….China. The #1 rated China stock market newsletter at a saving of over 60%

With this package, you would have all the tools to JUMP START your China Stock Portfolio in the right way. Remember that this offer will expire soon, so act now!Â

Committed to your PROFITS from China,

Jim Trippon,
Editor in ChiefÂ
China Stock Digest

P.S. Keep An Eye Out
Watch your inbox in the near future for a new newsletter covering some very exciting investment opportunities. Watch for it mid-December!

America’s Nightmare Looms in Beijing

He took a severe tongue-lashing from his Chinese counterparts. Now Henry Paulson is back in Washington, trying to fix our homemade financial crisis. How times have changed for China and for the U.S. investment scene.

Only two years ago the U.S. Treasury Secretary used to fly to Beijing regularly to lecture the Chinese about the right way to run an economy and stock markets. ‘Use debt to expand your financial potency,’ Paulson would tell Chinese banking authorities. ‘Use derivatives to make your stock markets bigger and safer,’ he cautioned them proudly as Wall Street investment banks went on a disastrous lending binge.

Now Beijing is America’s biggest banker. As we reported in the last issue of the China Stock Digest, China has surpassed Japan to become the biggest holder of U.S. debt with holdings of $585 billion in Treasuries alone. China’s economy is robust and cash-rich while America suffers through a painful recession.

America’s colossal debt helps us finance our ballooning budget deficit and recent stimulus spending. But it doesn’t end there. The U.S. may have to issue as much as $2 trillion in debt over the next year to pay for the financial-system meltdown, America’s wars in Iraq and Afghanistan, and further economic stimulus programs like the bailout of U.S. auto manufacturers.

It’s not a pretty picture. Beijing knows it and our bankers in the Chinese capital are getting worried. When Secretary Paulson arrived for his regular Strategic Economic Dialogue (SED) talks with the Chinese, his reception was chilling and unprecedented.

This time it was China’s turn to tell America to put its financial house in order. The cause of America’s financial crisis, according to China’s central bank governor is, over-consumption and a too-high reliance on credit.

Governor Zhou told Paulson bluntly that it was high time for the U.S. to rein in its huge trade and fiscal deficits. American consumers should be more like the Chinese and start saving more and relying less on their credit cards. After Central Bank governor Zhou said his piece he abruptly flew out of town, leaving the Treasury Secretary to the mercy of lesser officials.

It did get a lot worse for Paulson. The head of China’s sovereign wealth fund says he has lost the confidence to invest any part of the nation’s mountain of foreign reserves in U.S. banks. As he put it, he didn’t have the courage to invest in the U.S.

The balance of power has shifted enormously since 2005.  Back then China was forced to drop an $18 billion bid for Unocal, America’s eighth largest U.S. oil and gas production company, due to political pressure. Now America has changed its tune.

During the Treasury Secretary’s visit, Paulson welcomed “commercially based” investments by China’s central bank and it sovereign wealth fund in U.S. industries including finance. Until now, America has been blocking banks, insurance companies and brokerage houses from setting up shop on U.S. soil. Suddenly America needs every cent it can get from Beijing.

The nightmare lies in Beijing’s power to stop investing in the U.S. Even worse, Chinese authorities could ask for their money back. Pulling out more than half a trillion dollars worth of loans to the U.S. would have shattering consequences for America’s weakened economy. Washington knows it. So does China. Unless you’re a China Stock Digest subscriber, you may not be getting the facts.

The nightmare of a Chinese pullout from America’s financial system is real. A blunt remark by China’s Vice Premier was taken by many to be a threat. He told Americans to, “take all necessary measures to stabilize its economy and the financial market to ensure the security of China’s assets and investments in the U.S.” America’s previous U.S. investments have done poorly. Clearly the Vice Premier is warning that China might stop financing U.S. debt and investing in America.

Because China holds all of the cards financially, investment in the U.S. is being treated with scorn by some bank analysts. As one official said sarcastically. “ I am sure Mr. Paulson won’t treat China’s investments in U.S. Treasuries and debt markets as a threat to the U.S. economy when the U.S. desperately needs money to boost its economy now.” Blunt words indeed.
Because China’s economy continues to grow, it is seen by many as the new engine of worldwide economic recovery and expansion.

For the time being, China feels secure about its economic stability with well-capitalized banks, increasing profits among many private companies and trade surpluses that continue to set new records.

China has gone from being the sick man of Asia to the world’s banker and economic driver.

Committed to your PROFITS from China,

Jim Trippon,Â
Editor in Chief 
China Stock Digest

P.S. Don’t Forget About the 2008 China Stock Digest Holiday Investment Package: Your chance to get over $1400 in investment tools for a one time only price of $299. For complete details visit: Investment Package Details

The combined effects of plummeting U.S. stock indexes, and the collapse of mammoth financial institutions like Lehman Brothers and Bear Stearns have dragged down stock markets worldwide. The Shanghai Composite Index has fallen about 70 percent this year. Property prices have dropped in China, and export growth has slumped, all because of apprehensive investors waiting to see what happens next in the markets.

But Chinese banks learned their lesson from the Asian financial crisis of 1997, and have not fallen into the unsecured mortgage traps that plague so many US banks. China’s banking sector and the China economy remain strong and financially sound. Chinese banks hold massive reserves estimated at four trillion and have far more conservative leanding policies than their American counterparts.

As a nation China is cash rich, Beijing has about $2 trillion in US treasuries and $1.3 trillion in US assets. Interbank lending in China has not stopped as it has in the US, although lending has become more cautious.

China is also growing, even though the American economy is shrinking. On November 6, 2008, the International Monetary Fund forecast the growth of the Chinese economy to be 9.7 percent for all of 2008, and 8.5 percent in 2009. China’s economy is definitely not dead!

The Next Growth Engine

China’s economic growth trajectory will be lead by the rapidly increasing internal consumption, the growth of the Chinese middle class, and rise of capital stock.

China has also announced the infusion of an economic stimulus package of $885 billion by the year 2010. A large portion of the stimulus funds will be used to improve the Chinese infrastructure as well as reviving the housing market, improving transportation networks, increasing export tax rebates, delivering tax cuts and repairing damage caused by the Sichuan earthquake.

This economic stimulus package is also designed to increase the buying power and consumption of the Chinese consumer. Currently internal personal consumption only accounts for about 35% of the GDP of China. (The US is just above 70%) This package combined with lowering interest rates, and increasing domestic spending will catapult China into a steady growth pattern.

The best way to avoid recession is to not participate.

China’s leaders are determined to keep their economy growing, and to prevent high unemployment rates and avoid social unrest. For the past three days Beijing has been driving down the value of Chinese currency by the maximum allowable amount daily in a powerful drive to keep the nation’s exports attractive to nations in recession. China is poised to be the pioneer in rebuilding the global financial system.

In the December issue of China Stock Digest, my subscribers learned that retail sales in China are up 22% in October of 2008. This is a clear sign that the China economy is sticking to its plan.

Auto makers in the US are in Washington this week to plead for aid, while the sales of automobiles in China jumped 19.6% in October. The US is facing inflation threats that will top the charts. China has cured the inflation bug! Inflation dropped to 4%. This means that there is plenty of room to “stimulate” the economy for record setting growth. `

9 out of 10 China InvestorsÂ
  are NOT Making Educated Investment Choices

What should you do with the information that you have just read? Logically you would begin to look at industries in China like: banking, transportation and manufacturing. Will all of the manufacturing sectors grow by double digits? What provinces are in the most need of transportation network expansions? Are ALL Chinese banks not feeling the global economic crisis?

Don’t make a decision that could cost you your future! You have heard about the 8 stocks that our subscribers made between 9% to 43% earnings with during the 3rd quarter of 2008. That is an average of 28%. Our recent Thanksgiving promotion could have been paid for by the returns of China Stock Digest recommendations with a meager $750 investment. What does that mean?

For every China investment success story, there are many stories that don’t have happy endings. Why is that? It is because 9 out of 10 China investors are NOT making educated investment choices. Most China investors are relying on their own gut feelings or a news articles to make their investment decisions. That is investment suicide!

There are reasons that Dow Jones chose China Stock Digest as the #1 rated China stock market newsletter, AND the #2 financial newsletter in ALL categories. Is it because of the design? The good looking guy who writes it? The catchy title? ABSOLUTETLY NOT! It is based on one criterion: RESULTS!

A 39% return for 2006, a 58% return for 2007 earned China Stock Digest the #1 ranking by the world’s most watched financial rating system.

I want your China investment story to be a happy one. And I am dedicated to making sure you have every opportunity to create your own destiny!

Forget a Tie!  Investment ideas for the Dad Who Has Everything

As the Holiday Season approaches, we all struggle with gift idea for that one relative who has everything. Too often you end up getting them something that they will never use, but they have to accept with a smile. Well, I am about to put an end to the gift searching agony that we have all experienced.

2008 China Stock DigestÂ
Holiday China Investment Package:

This package has never been offered before, and is only available for a limited time. This package includes all you would need to begin successfully investing in the world’s fastest growing economy….China. The #1 rated China stock market newsletter at a saving of over 60%.Here is what the package includes:

Committed to your PROFITS from China,

Jim Trippon,
Editor in ChiefÂ
China Stock Digest

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Is China’s Economy Doomed?

Boom or Bust
Making Sense of Many Predictions about China

One key index, the Purchasing Manger’s Index (PMI), slumped by 68 percent from its record high last October. Export orders shrank by the largest degree since the surveys began, as the worldwide financial crisis weakened demand for China’s toys, textiles and computer products. So why does China’s economy continue to grow?

As we detail in this month’s issue of the China Stock Digest, Beijing has opened the floodgates of government spending. As much as one trillion dollars worth of stimulus is being injected into key sectors of the Chinese economy.

Just today Beijing upped the ante by committing another $145 billion to help poor families buy Chinese-made appliances. This new campaign is designed to absorb the excess production capacity caused by the export slump and to benefit industries like steel, plastics, and electronics.

This will be the key to keeping the Chinese economy in expansion mode, boosting the internal economy.

The worst case scenario? Probably the lowest authoritative prediction for the growth of China’s economy
comes from the World Bank. Just a few days ago the bank cut its forecast for China’s expansion from 9.2% to 7.5%. If only the U.S. could manage to grow half as fast.

As deeply as the World Bank cut its forecast, it said the country has “adequate tools” to keep the economy
moving at a healthy pace. Sure enough, one of those measures came out of the toolbox this week as the value of the Chinese yuan tumbled by record percentages against the dollar. This won’t be popular in Washington, but it will make Chinese exports more attractive to western buyers.

Not surprisingly, the brightest projections about the future of China’s economy come from 

The “huge” potential of domestic consumption and investment can counter the impact of a global slowdown.
While President Hu Jintao admitted that the central government faces enormous challenges coping with the global financial crisis, the shift to internal economic expansion is the key.

Exploiting the “vast development potential” of the world’s most- populous nation is crucial, so says the powerful State Council. Beijing is now working on further steps to help struggling companies in the steel, automotive, petrochemical and textile industries. It may also expand insurance for the jobless, a critical measure to avoid civil disturbances.

How times change! Just a few months ago China was clamping down on credit and reining in price increases to prevent the economy from overheating. With amazing speed, the government has changed from jamming on the brakes to hitting the gas with both feet.

The state pension fund has pledged to invest more in China’s depressed domestic stock markets. Insurance
  companies have also been instructed to boost their stock investments. Whether or not we believe that any government should tamper with the markets, the fact remains that

What does all this mean for investment in China? Although shares in Shanghai tend to rebound with every new stimulus announcement, we invest mainly in ADRs in the U.S. For the time being ADRs continue to follow Wall Street trends.

As we know, U.S. stock markets are continuing to gyrate wildly, and China-based ADRs are fluctuating in tandem. We don’t foresee stabilization among U.S. markets in the near future. That’s why we’re maintaining an extremely conservative policy towards China investments.

For the short term, new reports of weakness in the Chinese economy may further depress shares. But the
Beijing’s stimulus plans may have widespread effects during the first half of 2009. That’s when we may see the U.S. and China moving even more decisively in opposite directions.

As long as Chinese shares are being discounted, future buying opportunities are being created.

Doomsayers who predict catastrophe for China are always coming out with new predictions. The evidence says they are wrong again. Challenging months are ahead but challenge can create new opportunities.

Keep your eyes on your email inbox as we look for new opportunities. Our investment recommendations for this period will depend on quick buys and equally fast sales.

December’s issue of China Stock Digest put 8 stocks on the watch list. Subscribe now to gain access to these 8 stocks that have already earned an average of a 28% return in the third quarter of 2008. Subscribe now to gain access to these 8 stocks that have already earned an average of a 28% return in the third quarter of 2008: http://www.chinastockdigest.com/Page.php?Category=risk-free-subscription

Committed to your PROFITS from China,

Jim Trippon 
Editor In Chief 
China Stock Digest
  
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