China Still Booming Despite Any Recession



Tony Sagami takes a closer look at the Chinese economy and how it is continuing to grow despite the fact that the U.S. is falling into a serious recession. Mr. Sagami discusses the reasons China is growing and why it is expected to continue.

China, the economic engine of Asia, is still growing by leaps and bounds regardless of any U.S. recession in sight. The National Bureau of Statistics just released its 2007 full year growth figures for China and they were impressive. Gross Domestic Product soared 11.4% in 2007, the fastest pace in 13 years and China's fifth straight year of double-digit growth. Industrial output, an excellent measure of manufacturing strength, expanded 18.5%. Retail sales rose 16.8%, proving that the growing Chinese middle class is becoming less dependent on U.S. sales to support their economy. Per capita income of urban Chinese residents reached 13,786 Yuan (U.S. $1,907), inflation adjusted growth of 12.2% from a year earlier.

Those numbers prove that the Chinese economy is still growing like mad and continued growth should be expected. China is still a command economy controlled by the Communist Party. Moreover, the country's leaders have $1.4 trillion in cash reserves at their disposal. That gives them the ability to flood their economy with new public works projects, create jobs and keep things humming along.

That's exactly what's been done in the past. During the 1998 Asian financial crisis, Beijing injected the Chinese economy with a huge influx of government cash that kept their economy growing at an impressive 8 percent rate.

"And that's exactly what is expected this time. Just recently, the China Ministry of Railways announced a major increase in its construction plans. It will now shell out $41 billion to lay 7,800 kilometers of track. If Asia's growth is going to continue, it makes sense to accumulate while everyone lets their emotions get the best of them," Mr. Sagami states.

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About TONY SAGAMI & MONEY AND MARKETS     

Tony Sagami, a veteran investment advisor and a leading expert on Asian markets, is the owner and founder of Harvest Advisors, an investment research and money management company. Mr. Sagami has been managing money for more than 20 years and is one of the early pioneers in the application of technical and quantitative analysis to mutual funds and stocks. He is a featured contributor to Weiss Research's daily e-letter, Money and Markets and monthly Safe Money Report as well as the editor of Asia Stock Alert.

Prior to establishing his own firm, Mr. Sagami was managing director at W.E. Donoghue & Co, serving additionally as the director of investment. During his successful career, he also held the position of account executive at Merrill Lynch.

Mr. Sagami's views on Asian markets, specifically Chinese investments, have been featured in publications such as The Wall Street Journal, Barron's, Kiplinger's, Smart Money, Business Week, New York Times, Washington Post, Investors Business Daily, Bloomberg, Financial Planning Times, Mutual FundsMagazine, Chicago Tribune, and the LA Times, as well as on CNBC and CNBC Asia.

Mr. Sagami holds a degree in economics from the University of Washington.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.





China Still Booming Despite Any Recession