China is a booming economy. They are growing at a pace of 8-10% a year and there are little signs that it is slowing down.
The Chinese government does not want it to slow down, at least not until it catches up to the rest of the world. This means there are a ton of growth opportunities to be had here.
China is one of the biggest consumer markets in the world, and we are only scratching the surface. I think just about any company that is worth their salt will want to invest in China. I have been there myself. It is booming for sure.
There are Chinese stocks that you can buy on the US stock exchanges. Below are a list of Chinese companies that are listed on the NASDAQ or NYSE.
- PetroChina Company Limited (PTR)
- China Mobile Ltd (CHL)
- China Petroleum & Chemical Corp (SNP)
- China Life Insurance Company Ltd. (LFC)
- China Telecom Corporation Limited (CHA)
- China Unicom (Hong Kong) Limited (CHU)
If GE’s strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars. If it is right, it is the future of this company for the next century. – Jack Welch
You can now find other China stocks to buy now without having to trade on the Chinese stock exchanges. That is because pretty much all larger US companies are trying to carve out a place for themselves in China. In spite of all of the challenges of operating a company in an Eastern and communist nation, the potential returns are too enticing to ignore. Here are some of the stock that have their futures tied to China and it’s 1.5 billion people.
Apple Inc. (AAPL)
China just surpassed the US for having the most amount of smart phone users in the world. That number is about to grow exponentially more in the coming years. That means popular smart phone makers will have a huge market in China.
Apple is one of the leaders of the smart phone space, not only in the US, but also in China. That means their stock price will continue to climb only if they are able to grow their unit demand in China.
Things are looking good. Apple iPhones are super popular in China. It is so popular that pirates have even replicated entire Apple stores. It looks and feels just like an Apple retail store, yet it is all counterfeit.
The threat to Apple’s growth in China would be other major smart phone makers like HTC and Samsung, both of which are Asia based companies. Then you have Nokia which just partnered up with Microsoft, which is a staple brand in the international markets.
Caterpillar Inc. (CAT)
There is a real estate boom in China. In the past 5 years, real estate prices have jump almost 120%. That means prices have more than doubled in the past half decade. This jump in price is causing a building boom like we’ve never seen in the history of the world.
Although China is good at making light manufactured goods like socks, cheap toys and housewares, it still is not up to speed on heavy machinery. That is one of the reasons why Germany is still booming. They are selling China complicated manufacturing equipment that they have yet to match.
In the same vein, China does not have the heavy machinery needed to build all of this real estate. They are ordering these machines from companies like Illinois based Caterpillar. China is one of the main reasons Caterpillar stock has risen 44% in the past 5 years. This is also why their revenues have grown at an annual rate of 7.69% in the past 5 years.
One warning about CAT stock in regards to China is that they are heavily tied to the housing boom there. That means if there is indeed a housing bubble in China as many experts believe, CAT stock might bust right along with the real estate market there.
If you really believe that CAT is still a strong company with good fundamentals and great prospects for future growth, than you can buy more shares on the dip if the Chinese bubble pops.
Yum! Brands Inc. (YUM)
Yum Brands used to be the restaurant arm of Pepsico. They spun off to be their own company and their own publicly traded stock. They own, operate and franchise brands like Pizza Hut and A&W.
The reason I like Yum Brands for China is because they also happen to own the KFC franchise. Many people don’t know this, especially in the west, but Chinese people, and Asians in general, love Kentucky Fried Chicken. It isn’t even that they like fried chicken in general, but they love KFC.
I am not overstating this. You ask any Asian, both native or westernized alike, and they will sing the praises of the Colonel’s chicken.
In fact, Chinese people love KFC so much that they are outpacing McDonald’s in their growth there.
If you think there is a massive consumer class rising in China, then invest toward their tastes. Invest in Yum Brands.