I am interested in trying to find the best way to invest in the long term boom in China. I have looked at possibly buying SNP but (China Petro & Chem), but have heard that they are struggling with government imposed price caps and taxation on exploration. Anyone have any thoughts on SNP, or any other ideas for how to invest in such a way that will take advantage of the growing economy in China?
One idea is to look at other successful companies that have broken into China's markets. Companies that bought shares in Chinese companies tended to do so with the idea of gaining a controlling interest in a particular Chinese market. This almost never worked as capital was not so valued by the Chinese as was know-how. The companies that did well in gaining access to Chinese markets were the ones that were first movers into China, maintained a committed presence there, and did the grunt work such as develop their own distribution networks. That said, you could look for US or foreign companies (not Chinese ones) that demonstrate this. In addition look for countries whose economies are well hinged to China's growth (i.e. Japan, Korea, and Taiwan) in that they export to and import from China heavily. I have found that the convenience store market in China has been a good entrance into China's growth for me with less risk. As people in China need to work more they have less time to cook or to go to eat. The Asian markets for con. stores have been very dynamic in their development. The best know-how for creating China's is arguably in Japan and Taiwan. Look at the con. stores there that are active in China.Hope that helps.
I am just starting to look at China seriously. I own SEED (Origin Agritech) and have started a Board for that stock. I also own FEED (AgFeed).It is tough to know what is happening with a Chinese company. As some of the posts here note, a company can go from growing to trouble very quickly. But, China is the growth story in the world and owning Baidu and others have returned handsome profits.Chinese markets can be quite different. I own SEED because it gets tax exemptions from the government. China's leaders want to build a biotechnology base in ag products. What better way to grow than to be able to reinvest your entire profits?I also see that the Chinese government limiting what Monsanto and other world seed leaders can do. This protection should help SEED build mind-share in China as it creates its product base. When competition is let in, SEED should have reached a strong base in China and be ready to take on world leaders. That is a development advantage a new company competing in the US would never get.W.D.
I have a couple of Chinese investments but I will tell you: the more I read about China, especially from individuals who have had access to the highest levels of business and government, the more I am concerned that the whole economy and the market are plagued with significant fraud. I am definitely thinking of exiting. I know I may miss some paper gains but I am also concerned about a house of cards...
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