Chinese Penny Stocks-Are They A Good Investment?

While the rest of the world slumped into a global recession

, Chinese economy refused to bow down and kept on it's long march to growth. Chinese economic resilience has been amazing. When the global recession started and huge economies like the US slumped, predictions were that it would hurt the Chinese economy a lot as most of the Chinese exports are directed towards US consumers. As consumer confidence in US slumped, less and less Chinese goods will be sold closing the factories in China.

But amazingly, most of these predictions were proven wrong. Chinese economy refuses to slow down despite the fact that the major economies in the world are experiencing recession. But some critics have started calling the Chinese economy as bubble. Credit and property prices are exploding. These critics contend that the government stimulus package is propping up the economy.

But you should note this fact that the Chinese economy suffered with the rest of the world when the global financial crisis started but soon rebounded while the rest of world slumped into a recession. So if you had invested in Chinese Stocks and sold out earlier on the warnings issued by these pundits, you might have left early as there is still much opportunity in the Chinese economy.

One sector of the Chinese economy that is going to see robust growth in the near future is the Retail Sector especially the Consumer Electronics sector. Chinese electronics market that includes computers, laptops, mobile phones, CD Players and televisions is going to be worth $150 Billion by the end of 2010. It is expected to reach $220 Billion by 2014.

The interesting fact is that most of the new buyers in the coming few years will be the rural consumers in China. The Chinese government is in fact subsidizing the sale of televisions, computers, laptops, mobile phones to it's rural citizens in an effort to help them in catching up with the urban middle class.

What this means is that the retail electronics sector will see a lot of growth in the next few years. There are many tiny Chinese electronics companies that have a potential to give a good return. You will be able to find many of them listed with your broker. Most of these tiny companies have enormous growth potential. As usual, when you invest in penny stocks, always remember to do your research and only invest that capital that you can afford to lose.

Chinese Penny Stocks-Are They A Good Investment?

By: Ahmad Hassam

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