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China Fireworks: How to Make Dramatic Wealth from the Fastest-Growing Economy in the World

ISBN: 978-0-470-38297-4
224 pages
July 2008
China Fireworks: How to Make Dramatic Wealth from the Fastest-Growing Economy in the World (047038297X) cover image
As one of the leading experts on investing in China's economy, author Robert Hsu advises people every day on how a China strategy will truly take them to a new level of investing. With his new book, Hsu shows you how to build your fortune by participating in what he calls the "China Miracle." Page by page, Hsu helps you navigate this dynamic market and reveals the best ways to invest in the world’s fastest-growing economy.
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Preface ix

Acknowledgments xi

Chapter 1 Introduction to the China Miracle 1

Building True Wealth 3

The Real Growth Driver 6

Chapter 2 The China Miracle 9

Investment Essential #1: China's History 11

Investment Essential #2: China's People 18

Immigrants Impact Growth 21

Investment Essential #3: China's Values 24

Final Thoughts 26

Chapter 3 The Golden Rules 29

Pick Your Pitch 32

Knowing When to Buy 33

Be Wary of the Crowd 34

Buy Parameters 35

The Danger in Mainland Exchanges 38

Chapter 4 The Lay of the Land 41

Know Your Province 45

Beijing: Where the Waters Run Deep 46

Shanghai: Optimism Rules the Day 49

Other Regions: Finding the Real China 51

Northern China 54

Eastern China 54

Southern China 55

Central China 56

Hong Kong 58

Chapter 5 The Entrepreneurs versus the SOEs 63

Case Study: China Aluminum and China Southern Airlines 67

Be Wary of New IPOs 70

The Foundation of Great Companies 71

Chapter 6 Unraveling the Exchanges 75

Mainland China: A-Shares 77

Mainland China: B-Shares 77

Hong Kong: H-Shares 78

New York: N-Shares (ADRs) 78

Two Tiers Equate to Double the Diffi culty 79

A Closer Look at the Shanghai Stock Exchange 82

Avoid Mainland Exchanges 84

Chinese Exchange-Traded Funds 90

Chapter 7 Buying What China Buys 95

Find the Scarcity 99

Infrastructure Investing 99

Case Study: BHP Billiton and Rio Tinto 102

Testing Your Metal 106

Finding Profits in Power 108

Another Energy Play 112

Cleaning Up by Cleaning Up 114

Case Study: Trina Solar 117

The Future is with the People 118

Chapter 8 Buying What China Desires 121

Communication Buildup 122

A Must-Have Strategy 127

Hitting the Road 128

Sure Bets in a Risky Business 131

Case Study: Las Vegas Sands 134

The Richest Teacher in China 135

Tapping into China's Desires 138

China's Urbanization 139

The Basis of a Boom 142

Chapter 9 Buying What China Makes 147

The Reality of China's Exports 148

Balancing Price and Production 151

The Manufacturing Myth 154

The Outsourcing Backlash 158

Chapter 10 The Wealth of Chuppies 161

Determined to Make Their Mark 166

Housing 168

Disposable Income 168

Personal Finance 169

Case Study: Focus Media 170

Dining 173

Cell Phones 173

Transportation 174

Big Picture 174

The Rise of the Chuppies: Frances 176

Capitalizing on the Opportunities:

Kou Men-Yuen 178

Chapter 11 Serving the People 181

The Need to Feed 182

A Plastic Plan 187

Keeping Healthy 190

Investing in Insurance 195

Growing Fast in Food 198

Chapter 12 Danger Signs 207

Opening the Gates 208

Development in Western China 210

Improvement of Rural Farming Villages 211

Primary Education for Children 211

Prosperity and Infl ationary Pressures 212

Case Study: Baidu and JA Solar 217

Self-Proclaimed Experts 222

Getting Out 225

Case Study: Nvidia 227

Identifying a Bubble 229

Chapter 13 China's Political Place in the World 233

The Currency Conundrum 238

The Asian Coattails Effect 242

The Rise of a Superpower? 245

Chapter 14 Your China Strategy 251

Step 1: Gather Accurate Information about China 251

Step 2: Identify Industries That Are Growing 253

Step 3: Pick Industry Leaders 253

Step 4: Make Your Buy 255

Step 5: Be Ready to Get Out and Collect Your Profits 255

Step 6: Keep Your Eyes and Ears Open 256

Bibliography 259

About the Author 261

Index 263

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Robert Hsu is the founder and President of Absolute Return Capital Advisors LLC, a private client money management firm. His privately circulated investment information services, China Strategy and Asia Edge, published by InvestorPlace Media, LLC (www.investorplace.com) are currently two of the bestselling and fastest-growing financial newsletters in the United States. Born in Taiwan and fluent in Mandarin, Hsu maintains an organization of analysts in China who research and report firsthand on cultural, corporate, and governmental shifts within the country. Hsu graduated from UCLA with a BA in economics.

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