Bonds, Currencies, Emerging Markets, Funds / ETFs, Stocks

China Sees Its Economy Growing By 32 Percent Within The Next 5 Years

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The Chinese economy will grow by 32 percent in the next five years, surpassing $791 billion, the country’s government announced,” Sputnik reports.

By that time [2020] the total volume of China’s economy will surpass 90 trillion yuan, its quality and development effectiveness will substantially increase,

the government said in a Saturday report.

According to the government report, the budget deficit in 2016 will amount to $334 billion (3 percent of the GDP).

Premier Li said in his report presented at the NPC session on Saturday that China’s GDP will grow by at least 6.5 percent in 2015-2020.

China’s economy grew:

  • 6.9 percent in 2015,
  • 7.3 percent in 2014.

Earlier this week the outlook on China’s credit rating was lowered from stable to negative by Moody’s Investors Service as they cite a weakening of fiscal metrics, a continuing fall in foreign exchange reserves, and uncertainty about implementation of reforms.

ETFalpha consulting believe that China’s stock market will continue under-performing the generic MSCI Emerging Markets Index. They recommend to follow closely the $FXI (China) vs. $EEM (Emerging Markets) ratio which has been on the steep slide since mid 2015. Currently the ratio trades at 1.005 and the closest support level is at 0.95. Once this one is broken the ratio may go into a free-fall and find the next firm support as low as at 0.80.

Please feel free to share your opinions below.


ETF’s: $FXI $GXC $ASHR $PEK $CN

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