{"id":35644,"date":"2013-01-22T21:52:59","date_gmt":"2013-01-23T02:52:59","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=35644"},"modified":"2013-01-23T02:07:14","modified_gmt":"2013-01-23T07:07:14","slug":"heres-why-im-proudly-bullish-about-chinas-economy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/01\/22\/heres-why-im-proudly-bullish-about-chinas-economy\/","title":{"rendered":"Here\u2019s Why I\u2019m Proudly Bullish About China\u2019s Economy"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a> <\/p>\n

It amazes how anyone can be bearish on China’s economy<\/strong>\u00a0\u00a0when its has just grown FIVE-FOLD in the space of ten years.<\/p>\n

That\u2019s right. My name is Alex Cowie<\/a> \u2014 and I\u2019m bullish about China.<\/p>\n

It\u2019s not exactly the most popular view in this office, but it\u2019s what I believe.<\/p>\n

<\/span><\/p>\n

We\u2019ve had a great few emails recently asking us what we\u2019re playing at, like this one from Phil:<\/p>\n

\n

\u2018Did I miss something? I’m not sure whether you guys have short memories, but what happened to your big predictions of China going bad?\u2019<\/em><\/p>\n<\/blockquote>\n

Well, one of the good things about working here is that no one tells you what to believe. There is no \u2018party line\u2019 we have to tow. Most of the Editors are bearish on China.<\/p>\n

But I\u2019m pretty much the odd one out. I\u2019ve been unashamedly bullish on China for years now.<\/p>\n

In fact in the January Diggers & Drillers<\/em><\/a> newsletter, I\u2019m shouting my pro-China view from the rooftops.<\/p>\n

Because thanks to China, I actually think that the big trade of 2013 is to buy the best of the Australian resource market\u2019s beaten up \u00a0junior\u00a0mining stocks<\/a>\u2026<\/strong><\/p>\n

Now I\u2019m not saying this because China just announced the first increase in its annual economic growth rate for two years. If you missed it, on Friday the December quarter GDP jumped to 7.9%, from 7.4%.<\/p>\n

 <\/p>\n

China\u2019s Economy Grows for the First Time in Two Years<\/h4>\n

\"China's<\/p>\n

Source: Trading Economics<\/em><\/p>\n

Any kind of improvement in China\u2019s growth statistics is good news for resource stocks<\/a> of course. As the world\u2019s biggest consumer of commodities<\/a>, Chinese economic growth will generate a jump in commodity demand.<\/p>\n

But a single jump in quarterly growth isn\u2019t the reason I\u2019m making a Tarzan-like battle-cry for copper, iron ore and coal.<\/p>\n

It\u2019s something else altogether \u2014 something political \u2014 that makes me believe that 2013 will be the most incredible turn around year for the beaten up mining juniors<\/a>.<\/span><\/p>\n

Now I can\u2019t give too much away as that would be unfair to paying readers of Diggers & Drillers<\/em><\/a>. But I\u2019d like to share with you a snippet to give you an idea of what I think\u2019s in store for the year:<\/p>\n

\n

\u2018…I want to go on record today as saying that CHINA IS DOING JUST FINE<\/strong>.<\/em><\/p>\n

\u00a0<\/em>\u2018The China bears like to overlook that the latest growth rate of 7.9% is above target (and never mind that 7.9% is still stellar<\/strong> growth by any standards).<\/em><\/p>\n

\u2018And let\u2019s remember that 7.9% growth today adds far more<\/strong> to China\u2019s economy <\/em>\u2014 and therefore requires more commodities <\/em>\u2014 than 13% growth did when China was a third of the size.<\/em><\/p>\n

\u00a0<\/em>\u2018So I want to start my first letter of the year by telling you the China-bears are about to be forced to eat their words<\/strong>, as it drives the next leg up in resource stocks. This month\u2019s copper stock tip won\u2019t be the only one looking at a 260% gain.<\/em><\/p>\n

\u2018…This <\/em>[infrastructure spending] will require vast amounts of commodities. I reckon mining stocks are just about to be reminded of what it feels like to have China screaming for more<\/span> of their product.<\/em><\/p>\n

\u2018And the good news for you<\/strong> is that this comes right at a time when junior stocks in the industrial commodities of copper, iron ore and coal<\/span><\/strong> are dirt cheap<\/strong>.<\/em><\/p>\n

\u2018To me this spells out the perfect recipe for what should be the big trade of 2013<\/span>.<\/strong><\/em>\u2019<\/em><\/p>\n<\/blockquote>\n

And they really are dirt cheap<\/span>.<\/p>\n

After selling off since early 2011, many good quality mining juniors in iron ore, coal and copper are now less than half the price<\/span> they were two years ago.<\/p>\n

This includes the ones with good, profitable projects, and strong growth prospects ahead.<\/p>\n

The first Diggers & Drillers<\/em> <\/a>tip of the year is a copper stock, but there will soon be other tips in juniors involved with iron ore, coal, as well as the less well known minor ingredients of steel.<\/p>\n

Starting with copper was a \u2018no brainer\u2019.<\/p>\n

The reason was the price had done next to nothing for 12 months.<\/p>\n

That may sound like fuzzy logic, but think about it. There was every reason for copper to collapse last year \u2014 the markets were about to crash, China’s economy<\/a> was supposedly collapsing, and the financial markets were apparently about to implode \u2014 Yet Copper held firm all year.<\/p>\n

No Worries for Dr Copper in 2013<\/h4>\n

\"No<\/p>\n

Source: Stockcharts<\/em><\/p>\n

I\u2019m expecting the Chinese economy<\/a> to have a good year in 2013, and as the world\u2019s biggest consumer of copper by far \u2014 at 43% of global consumption \u2014 the copper price could be in for an increase. And sure enough, China has just set an all-time record for copper imports.<\/p>\n

Back in 2010 I made the same case, and the other guys here thought I was nuts. But you can see in the chart, copper rose by over 60% in twelve months.<\/p>\n

Now I\u2019m not expecting that to happen again, but a 10-20% rise is possible. The technical chart looks quite bullish to me, and the fundamentals look good too.<\/p>\n

So copper was the first industrial metal to kick the year off with.<\/p>\n

But as readers of Diggers & Drillers<\/em> will find out over the next few months, coking coal and iron ore <\/strong><\/a>are in hot pursuit.<\/p>\n

Dr Alex Cowie<\/strong><\/p>\n

Editor, Diggers & Drillers<\/em><\/strong><\/p>\n

Join Dr Alex Cowie on Google +<\/a><\/p>\n

From the Port Phillip Publishing Library<\/em><\/strong><\/p>\n

Special Report: The Big Money Secret of Ironstone Mountain<\/a><\/p>\n

Daily Reckoning:<\/em> A North Korean Investment Opportunity<\/a><\/strong><\/p>\n

Money Morning:<\/em> <\/strong>How Central Banks Are Letting Inflation Get Out of Control<\/a><\/p>\n

Pursuit of Happiness:<\/em> <\/strong>Are You Brave Enough to Break From Technology?<\/a><\/p>\n

Diggers and Drillers<\/em>:
\nWhy You Should Invest in Junior Mining Stocks<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au It amazes how anyone can be bearish on China’s economy\u00a0\u00a0when its has just grown FIVE-FOLD in the space of ten years. That\u2019s right. My name is Alex Cowie \u2014 and I\u2019m bullish about China. It\u2019s not exactly the most popular view in this office, but it\u2019s what I believe. We\u2019ve had a great … <\/p>\n

Continue reading “Here\u2019s Why I\u2019m Proudly Bullish About China\u2019s Economy”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-35644","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/35644","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=35644"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/35644\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=35644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=35644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=35644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}