As you can see, the cost of crime in China is extremely high.
Communist Party Control Extends To Almost Every Aspect Of Personal, Political, And Especially Economic Life
The Chinese government has figured out that the fastest way to eradicate poverty and increase its standard of living is by growing its economy. China has successfully reduced the number of its citizens living below the poverty line from 200 million in 1981 to less than 30 million today.
One of the biggest threats to China's economic prosperity today is the country's stumbling stock market. The mainland stock market (which is closed to foreign investors like you and me) has lost more than 50% of its value from its November high and millions of Chinese investors are stinging from the losses.
And the Chinese government has flat out vowed that it will make sure the stock market doesn't fall any further. Shang Fulin, chairman of the market watchdog China Securities Regulatory Commission, has reportedly said "total efforts" must be made to preserve the stability of the capital market.
That comment was followed by an article in the government-controlled Beijing People's Daily that recommended 10 government measures to revive the stock market. Some of these include:
- Stricter standards to regulate non-tradable share conversions ...
- Controlling large-scale new share issues ...
- Establishing a timetable for the launch of index futures to stabilize prices ...
- Encouraging stock repurchase by listed companies ...
- And setting up a special government fund to help shore up share prices.
Did that last one perk up your ears? It should have! A senior Chinese securities official, Jiang Lianhai, is in favor of setting up a fund to help stabilize the stock market, the first time a government official has openly suggested direct government support of the stock market.
As Lianhai recently told the
China Daily,
"It's necessary and urgent to set up buffer funds to confront big speculators and stabilize the mainland market. The government had no reason to stay on the sidelines of the troubled stock market and its intervention could help stem destabilization."
Let me tell you, you won't find mid-level officials making public comments that are not part of a well-orchestrated government plan.
So Make No Mistake: The Chinese Government Wants the Stock Market to Bottom ... And What They Want, They Get!
Look, I can't guarantee that this is the absolute bottom of the Chinese stock market's decline. But I sure think it is. With the Olympics right around the corner, the last thing Chinese officials want is the country's stock market taking anything away from China's new status as a modern, prosperous country.
I believe that any dollars you put to work in China today should be the most productive investment you'll make this year.
Where should you look? I've mentioned these names several times in the past, but I think it's worth looking into companies like China Mobile (CHL), E-House (EJ), and New Oriental Education (EDU).
Or, if you're more of an ETF investor, check out either iShares FTSE/Xinhua China 25 Index (FXI), SPDR S&P China (GXC), or PowerShares Golden Dragon Halter USX China (PGJ).
Because as I told you earlier, what China wants ... China gets ... and what it wants now is for the stock market to move higher.
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