Investment bankers are examining where growth will happen and if the growth happens, which companies and countries will benefit. One method to do this is to examine which countries had bad years or down years, on anyone’s list should be China. Part of the reason for the down years is the existing government policy to stop COVID 19 outbreaks by shutting down the area. Given COVID is a respiratory infection, it is difficult to stop and that has led China to shut down cities with millions of people producing goods and services.
In an article from Reuters, China’s exports and imports shrank at their steepest pace in at least 2 1/2 years in November, as feeble global and domestic demand, COVID 19 production disruptions and a property price slump piled pressure on the world’s 2nd largest economy.
Exports were down 8.7% in November as compared to a year earlier. The expectation was a 3.5% drop.
The ruling Communist Party emphasized the government’s focus in 2023 will be on stabilizing growth, promoting domestic demand and opening up to the outside world.
Inbound shipments were down by 10.6%, weaker than a forecast of 6%.
Imports of soybeans and iron ore fell in November from a year earlier, while those of crude oil and copper rose.
The trade surplus was $69.84 billion compared to $85.15 billion in October while analysts were expecting $78.1 billion.
Surveys of businesses suggest many more months of hard grind ahead to find the growth China once had.
Linking to dividend paying stocks, in every country and every sector there are stocks which are greater value or beaten down than others. Are the stocks, great value or will they rise as time goes on. If the Chinese government opens up that it suggests it will, the stocks might be great value, if not there is always another reason holding the stocks down. What you are looking for are the stocks that will grow because they are profitable and eventually pay dividends. Doing your homework at the end of the year is important as it is the rest of the year.
There are more questions than answers, till the next time – to raising questions.