{"id":33057,"date":"2012-10-19T10:15:55","date_gmt":"2012-10-19T14:15:55","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/10\/chinas-gdp-a-high-quality-problem\/"},"modified":"2012-10-19T10:15:55","modified_gmt":"2012-10-19T14:15:55","slug":"chinas-gdp-a-high-quality-problem","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/10\/19\/chinas-gdp-a-high-quality-problem\/","title":{"rendered":"China\u2019s GDP: A High-Quality Problem"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

China has what I like to call a \u201chigh quality problem.\u201d<\/p>\n

The Chinese economy grew by 7.4 percent in the third quarter.\u00a0 This was the country\u2019s worst quarter since early 2009, but it was in line with market expectations.<\/p>\n

Only in China would 7.4% growth constitute a severe slowdown.\u00a0 I don\u2019t have to tell you that this is far<\/em> above the growth rates of any other country of any real size.\u00a0 China may not be growing like it used to, but it\u2019s still the best show in town among major world markets.<\/p>\n

Sentiment on China remains awful\u2014just this past week, Coca-Cola (KO) joined the long list of Western firms blaming lackluster growth on the Chinese slowdown\u2014but the data is mixed and showing signs of life.\u00a0\u00a0 Releases o n fixed asset investment, retail sales and industrial output all beat expectations.<\/p>\n

All of this rotten sentiment has translated into some pretty horrendous stock returns for Chinese investors.\u00a0 Chinese stocks have been in almost continuous decline for the past two years\u2014at least up until last month.<\/p>\n

\"\"<\/a><\/p>\n

I recommend investors take a look at the iShares FTSE China 25 Index ETF ($<\/span>FXI<\/a>)<\/strong>.\u00a0 I like what I see here.\u00a0 Chinese stocks appear to be starting a new uptrend, even while sentiment towards them remains terrible.<\/p>\n

If the Chinese economy maybe\u2014just maybe\u2014doesn\u2019t end up being as sick as everyone seems to think it is and we see some signs of life in the next few months, sentiment can shift if a hurry.\u00a0 And when it does, I expect FXI to enjoy a quick boost.<\/p>\n

7.4% growth in a slow-growth world isn\u2019t half bad, and eventually investors will reach the same conclusion.\u00a0 In the meantime, we\u2019re getting access to an index that trades at 8 times earnings and yields 2.7% in dividends.\u00a0 Not too shabby indeed.<\/p>\n

This article first appeared on TraderPlanet<\/a>. \u00a0Sizemore Capital currently has no positions in any securities mentioned.<\/em><\/p>\n

The post China’s GDP: A High-Quality Problem<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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