China - Will it crash?

I believe China will go through a soft landing. You can throw all the crash scenarios of China into the trash bin. We have Jim Chinos who had been shorting the China market but he is 15 years too early! Also, we have Gordon Chang who has been promoting the coming crash of China for more than a decade but it never came. I heard him recently in a conference and he will be wrong again!

In 2005, I felt the same way when so many analysts were calling for a crash into China. But those who did missed one of the biggest booms in history.

Similarly, I believe we are going to experience the same thing in the next five years.

China will go through a soft landing. GDP will lower from 10-12% to a sustainable 6-7%

China is going through a major transition in its government. The boom is at least irreversible for the next decade. It will have its up and downs. It will be a peaceful one although there were tensions, sending some key figures to jail and fierce politicking. Xi Jinping is expected to take power as president in March, 2013, and will owe a broad range of constituents favors for his successful ascent. To solidify his position he will engineer a broad rise in the country’s standard of living that will benefit everyone in the country.

My guess is that he will continue the privatization efforts of industry, keeping yuan up and sending the country into a unprecedented boom.

So watch out for commodities like food, copper, palladium as citizens with a higher income strive to catch up with the west.

It is an exciting time. If you catch it right, it will make you very rich indeed.

I have added some China ETFs, accommodation and stocks to my accumulation list. I will be very interested if the market goes through a phase when there are maximum fear.