China’s gross domestic product positively soared in the first quarter, dusting economists’ expectations. Such growth begs two questions: how can you invest in China using exchange traded funds (ETFs), and is it too late? Read on for the answers.
China’s GDP accelerated in the first quarter from a year earlier by 11.9%. Even the most pessimistic forecasts called for a 10.7% rate of expansion, so this news was greeted with both jubilation and surprise. The growth has mostly been driven by stimulus spending. Digging down into the numbers, you’ve got to consider that they’re in comparison with numbers that were coming out at the height of the recession.
Still, they’re up and that’s good. That’s not all that’s up in China:
- The consumer price index rose 2.4% from a year ago, which is more or less stable, but may keep the government from raising interest rates for now.
- The producer price index gained 5.2%, reports The New York Times.
- Industrial production is up 18.1% in March from one year ago.
Is the China rally overdone? The trend is up. Many China ETFs are above their 200-day moving averages (at least those that have been around long enough to establish that line). You can’t fight that trend. Yes, it may end tomorrow. It may keep going. Use a trend following strategy to buy and sell, and have a stop loss. [How to Follow Trends.]
For more stories about China, visit our China category. Some ETF plays, including a couple that offer a little leverage if you want more oomph (just know the risks!):
