Now that the Fed has passed on its most recent opportunity to undertake another round of quantitative easing to boost the economy, American investors may be looking to a surprising source for optimism: China. The China Securities Journal reported that the government there may be trying "more proactive" policies to restore some growth to the Chinese economy. That probably means the Chinese version of a stimulus package.
China's economic growth for the second quarter of this year has been estimated at around 7.9 percent, with full-year growth at around 8.2 percent. That may sound pretty robust compared to the American economy, but it would be their lowest GDP growth since 1999. Hence, the need for stimulus.
China is a huge and growing market for U.S. products: We exported $103.9 billion worth of goods to China in 2011, up from just $16.2 billion back in 2000.That's a 542 percent growth rate over the decade, compared with a growth of 80 percent for our exports to the rest of the world combined. Even New Jersey - not an area usually associated with exports to China - sold $1.9 billion worth of goods to China last year. A boost for their economy would also be a boost for ours.
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