Red China BizWatch
China's growth will hit 9.5% in 2004, up from 8.5% in 2003. But that doesn't mean China has great companies. Most Chinese managers don't know what serving shareholders' interests means and lack the training to run their companies well.
China's banks are insolvent because 40% of their loans are worthless. The government will inject $100 billion into the Big 4 banks to get the bad debt down to 30%. And Regulators will make sure more government money won't wind up funding more bad loans.
China will not drive global economic and political events in the next years but will hit a brick wall. Politically driven investments will cause a decade of political and economic turmoil. China will eventually make the painful political and economic changes necessary to right the problem.
The Chinese appetite for food and energy makes investing in big food producers in Argentina, NZ and Aussie a cheap way to catch a ride with China's fast growth. Energy co's with large ops in the Russian Far East, Indonesia and Aussie will profit from being close to China. Global mining companies should do well. As Chinese demand drives up fossil fuel prices, high-cost oil sources like Canada's tar sands, and makers of solar cells and windmills will benefit.
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