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China's Confidence Goes Up. More Demand for Chinese Translation, But Concerns for Interest Rates.

The official Chinese purchasing managers' index (PMI) jumped to 56.6 in December 2009 from 55.2 in the previous month according to the China Federation of Logistics and Purchasing.  Demand for Chinese translation services goes up, but investors are concerned about the central bank tightening interest rates.  Any good investments in China? Please write to us and let us know.

By Samuel Chong
December 31, 2009

Los Angeles. The Chinese economy is set to continue its growth in 2010 as the official Chinese purchasing manager's index jumped in December 2009, from 55.2 of the previous month to 56.6, according to the China Federation of Logistics and Purchasing.

"This is mainly due to the internal demand from China.  The factories in costal regions were affected by the financial crisis in 2008, but the internal demand seems to have overpowered the affect of global trade." says Andy Zhang, a financial analyst in Chicago.

"China has also been importing more and more products from South Korea and Japan, and even more so from Mongolia" says Peter Wei, a trade analyst in Los Angeles.

"There have been more demands for our Chinese translation services, our Chinese advertising services, and Chinese travel services", says Sally An. "We now not only have request from people in New York and Hong Kong, but also Dubai and Vancouver."

It seems the demand from China has brought more businesses for companies that deal with China.

"There have been more people interested in learning Chinese", says Michelle Li, a Chinese language tutor at Los Angeles Chinese Learning Center.

While businesses seem to have picked up, investors in China or those with China related shares are increasingly worried about the next step of China's central bank, the People's Bank of China.

"Whenever the economy seems to be picking up, the people at the central bank are concerned about inflation and bubbles.  Whenever the stock market goes up to a certain percentage, the policy makers would want to cool the market down in order to prevent over heating of the market or the economy", says Gary Tan, a Chinese investor.

Indeed, the Chinese stock market and Chinese real estate market have both been gaining double digit returns.

"There is an increasing concern for the occurrence of a bubble in the Chinese economy.  I would be a bit careful when investing in China now." Says Warren Wang, a Chinese investor who closely follows Warren Buffett. "They might increase interest rates soon."

However, others disagree.  "With the possibility of a continued appreciation of the Chinese Yuan, if you play it right and invest in mainland China, you will still make good returns." Says Virginia Chen.

Meanwhile, notable investors such as Jim Rogers have been advising people to purchase commodities in order to play the boom of the Chinese economy.  Jim Rogers argues that China will purchase more and more commodities such as rice, wheat, corn, cotton, and sugar in the coming years.  Therefore purchasing commodities would be a safe investment.

Jim Rogers also suggested people to invest in companies that would help China's environment.  In fact, we have suggested that China needs companies that specialize in producing algae biofuel or algae oil.  Bill Gates and Exxon Mobil invested in these companies. However, so far, only a few algae biofuel companies have made into China.

Any good investment advice for people who want to play the growth of the Chinese economy?  Let me know of your ideas.

This article can also be found at http://www.certifiedchinesetranslation.com/09/1229-China-Factories-Chinese-Translation-Interest-Rates.html