Get ’em While They’re Cheap: It May Be Time to Buy into China

 

The Peterson Institute featured a blog post yesterday that highlights a very important point about China that traders and investors are missing.  Despite all the concerns about an extreme devaluation, it’s still running a trade surplus–the world’s biggest, actually.  Granted, the herd behavior in the markets right now does have the potential to become self-fulfilling, especially if the Fed keeps tightening.  But if it doesn’t and markets can return to fundamentals, 6.5% growth, a $300 billion trade surplus, room to move on monetary policy, and low fiscal debt (especially for a country whose debt is predominantly held internally–to see how much fiscal room that gives a country, see Japan’s debt at 230% of GDP) will look plenty appealing to investors.  In the medium term, China will likely remain a global bright spot.

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