July 20, 2010 – China Can’t Boom Forever

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iShares FTSE China 25 Index ETF

4) China Can't Boom Forever. Last week, China (FXI) announced that its first half GDP grew at a blistering 11.9% annualized rate, more than triple the growth seen here in the US. And this is how they're doing with central bank tightening in place! How long can this laudable performance last? Not forever, says the country's Development State Research Center of the State Council. The economic research think tank sees the Middle Kingdom on a gentle glide path from the current double digit growth rate down to as low as a 6% average by 2030, as it matures. Of course, I'm sure that reality will come in far choppier than this. I watched Japan do exactly this from the sixties to the present, its own growth rate falling from 10% to 6%, them 5%, 3%, and today's 1%. Suffice to say, make hay while the sun shines, and never stay married to your positions.

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