How to Invest Your Money in China's Economy

Video Transcript

"Did you watch the Olympics this past summer in Beijing? Did you see that sparkling, glorious city? Well, 20 years ago, it wasn't that way. 20 years ago, it was drab and old and kind of crummy. Even today, if you look away from the cameras a little bit, you quickly find that much of China remains old. It doesn't mean that it will be old in 20 years. It won't. So there's quite a bit of development to go. How can you benefit? Well, China has a very large stock market in which you can buy publicly traded stocks. Their idea, though, of openness and reporting is significantly different than we have here in the United States. So know, as an individual investor, especially if you can't speak Mandarin, I would suggest not buying Chinese stocks. However, you could buy stocks in Hong Kong or you could buy stocks in Taiwan or you could buy stocks in Macau, which give you all of the benefits of being in China, but with fair and open reporting. Now, what do people need? They need everything! Most Chinese people today have cell phones. Clearly, this is going to be the biggest cell phone market in the world, but that is something always to consider. They have three very large publicly traded telephone companies, and you can purchase them either here in the U.S. or in China. That's number one. Number two, they want to drink more. They want clean water and they want soft drinks and they want beer and all of those are publicly traded. Some trade here in the United States, some trade in Hong Kong, and some trade in China. Last, everybody wants more power. They want air conditioners and they want heat, and even they want electric cars. So you can buy electric power companies in China. Some of them trade here in the U.S., and some of them trade in China, and some of them trade in Hong Kong. But those are all things to consider about things to buy. Last, but not least, green in China. Well, I know here in the United States, we talk about going green quite a bit. In China, that's a difficult thing, though, because so many of the people don't have clean water and so many of the people don't have sanitation plants in which effluent can be routed and cleaned. Therefore, expect green to remain underground for a while in China until the very basics are met. You like glitz? Well, the largest gaming companies in the world -- you know, the casinos -- are in Macau. You wouldn't think that, but in fact, they are. So one other thing: China is not for the faint of heart. It's been very volatile over the last year. Is it going down half a year ago, and then up and then back down and... You have to be able to handle significant volatility. That doesn't mean you can't make money. The question is: Can you stomach making money? So I hope that helps. I'm Roger Groh. It's a little bit about making money in China, and thank you very much."