Look at China Go!

20 July 2007

Gravity tells us that what goes up must, eventually, come down.  A theme at the start of 2007 was that China would start to see some softening in its economy following years of record growth.China_growth_2

Well, China isn’t slowing down….it’s not even rolling along…..it’s surging!

This week China reported second quarter growth in GDP of an incredible 11.9%.
So substantial was the growth figure that China moved to “cool” its economy today by boosting interest rates. 

Riding on the coattails of this continued surge in the Chinese economy are many oil, gas, gold, silver, uranium, copper, and other commodities companies throughout the world.  After all, these commodities are feeding China’s growth.

For IR professionals it has been somewhat of a challenge of late to justify the lofty valuation of their respective companies because of substantial gains in the recent past, primarily due to China’s growth.  Those same IR professionals will now enjoy being able to point to China’s latest growth figures, not only as justification for today’s lofty valuations, but as a significant data point in defense of further share price gains going forward.

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