Investing In China: Video Roundup
The latest selloff in the Chinese stock market had a relatively muted affect on global markets compared a similar decline in late February. One thing hasn't changed, though, and that is the consensus that the Shanghai market will bounce back. Nevertheless, each event -- whether you consider it a hiccup or a warning sign -- begs the question: Is the Chinese market worth the risk and if so how do you play it. Here's a sampling of CNBC's coverage.
The China bubble is no myth, says Michael Hartnett, but the global emerging markets strategist at Merrill Lynch says the global economy has nothing to fear -- yet. He joined "Squawk on the Street" to discuss China's "crazy" market and how far it still may go.
China's superheated economic growth constitutes "a bubble, no doubt about it," Hartnett told Erin Burnett. But he believes the bubble is only beginning to grow: Hartnett predicted that the market will be "up another 50% in the next year."
Most market watchers discourage investors from investing directly in China, even if it isn't very easy to do in the first place. Instead, money managers suggest mutual funds or exchange traded funds that hold Chinese companies. In many cases, these are Asia-Pacific funds, which include companies from other countries in the region, and are not so-called "pure play" funds. Investors with braver hearts can invest in Chinese companies that trade on U.S. exchanges, known as ADRs.
Robert Hormats, author of "The Price of Liberty" & vice chairman of Goldman Sachs International, and Mark Headley, Matthews Asian Funds president, talked about the opportunities with Michelle Caruso-Cabrera.
As Mary Thompson reports, there are other, less direct ways to invest in China and cash in on its growth. Investors should look at U.S. companies –- as well as firms from other countries -- with significant business in China or the potential for it.
There's also a commodities play in that China, with the country devouring large amounts of coal, steel and other raw materials as part of an ongoing building boom, which includes facilities for the Beijing Olympic Games scheduled for the summer of 2008.
Rob Lutts, founder and chief investment officer of Cabot Money Management, believes it's time to drop the word "emerging" from descriptions of China's economy. China, he says, now has a firmly established economy. “I think it’s a misnomer to call these ‘emerging economies,’ ” Lutts said. “China has arrived. It has a tremendous foundation for growth.”
Lutts said China has the workforce needed to move ahead. Entrepreneurship, a commitment to growth, and manufacturing cost advantages all will combine to ensure that growth in China is "not going to stop," Lutts said.