Some economists wary of Chinese economic trends

- By John March
Some investors have been optimistically looking to emerging nations like China and India to help the global recovery gain momentum in the coming months.

This is because both countries have seen their gross domestic product continue to expand in recent quarters, even as the recession held back growth in much of the rest of the world. An emerging middle class in both nations is seen as having the potential to provide new consumer spending markets for corporations.

Also, manufacturing activity, particularly in China, could help sustain the price of some commodities and strategic metals as economic conditions improve.

However, some economists are warning against becoming overly optimistic about this scenario. In fact, recent months have seen increased concern that China's economy could turn out to be a bubble, citing real estate prices in Beijing and heavy lending activity by banks that could turn out to be ill-advised. In fact, China's government appeared to respond to such concerns earlier this year when it took steps to scale back lending activity.

More recently, a report in the UK's Telegraph newspaper warned that "China's banks are veering out of control," while predicting that the country's "half-reformed" economy will not be able to absorb some $600 billion in loans issued since December.

The Telegraph cited another potential disturbing trend for investors where Shanghai's composite index has risen 70 percent in the past six months while the country's imports have fallen 25 percent over the past year.

The newspaper also noted that 40 percent of China's economy consists of exports, which happened to fall 26 percent in May. Another point cited the increasing tendency of U.S. consumers to save their money, which does not bode well for a sudden and dramatic improvement to China's export figures.

Another red flag for China is the ongoing debt crisis in the euro zone, since this could turn out to be one more blow to its export sector. The euro has fallen considerably in recent weeks, which means consumers could find themselves paying more for Chinese goods at a time when their respective governments are implementing significant new austerity measures.

If Chinese economic growth turns out to be more of an illusion than a reality, it would have a substantial impact on the global economy. Fortunately however, investors have long known that times like these often call for the stability that dealer gold and other precious metals can offer.


John March is the Chief Technical Officer for the Superior Gold Group, his financial insights on precious metals are sought after by Gold & Silver Dealers globally.

If you have any questions about how to buy gold coins, and want to learn how to grow your portfolio call 888.374.4032 or write to askjohn@gold101.com.
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Chinese economic growth means now is the time to buy gold coins

One reason that this may be a good time to buy gold coins is the strong growth that China has continued to experience with its economy in recent months.

According to a recent release from the National Inflation Association (NIA), China's economy is "not a bubble" as some may believe, even if the country's GDP did grow at a 10.7 percent rate last quarter. The NIA noted that China's economy actually grew at its fastest rate since 2007, despite the overall state of the global economy.

The group also predicted that recently-announced moves in China to slow the lending pace of its financial institutions will only work to further strengthen its economy, although some financial experts had thought this could actually dampen its growth.

One reason for expectations of ongoing Chinese economic growth is that the country is continuing to expand its exports to a number of other countries beyond the United States. Even if and when the country's GDP does slow, it is not expected to result in a major economic setback.

Another reason to consider gold investments is that a strong middle class is continuing to emerge in China, which has further fueled demand for precious metals in both jewelry and industrial applications.


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