ICBC (Industrial & Commercial Bank of China) is the Biggest Bank in the World, measured by Customer Deposits. It now has CNY 8.9 trillion (RM 4.5 trillion or around US$1.2 trillion) as at end of March 2009 in Customer Deposits. JP Morgan used to be the largest with US$1 trillion.
China's rise is amazing, and China's Might dwarfs that of most other countries in the world.
However, despite China's Might, it is still not in a position to drive the world economy. The US remains the only key driver of world economy. Nevertheless China's domestic consumers are sufficiently large to have a significant impact on its country's economic growth.
China's rise is amazing, and China's Might dwarfs that of most other countries in the world.
However, despite China's Might, it is still not in a position to drive the world economy. The US remains the only key driver of world economy. Nevertheless China's domestic consumers are sufficiently large to have a significant impact on its country's economic growth.
This is an important reason why we should be bullish on China, at the right time and why we cannot ignore investments in China in the next one to two decades.
Currently, an important way to invest in China's stock market and take advantage of China Might and Future Economic Growth Prospects is through the iShares FTSE Xinhua China 25 ETF (Exchange Traded Fund).
Currently, an important way to invest in China's stock market and take advantage of China Might and Future Economic Growth Prospects is through the iShares FTSE Xinhua China 25 ETF (Exchange Traded Fund).
However, there are risks involved. The key risks are political and social stability. Whilst China is relatively stable today, the growing divide between the Rich and the Poor, not only between Rural and Urban areas, but more importantly, within each city or town, is a potential driving force that may cause disruption to its continued political and social stability and thus, its economic success.
In my opinion, China's Government understands this risk of a Growing Wealth Divide very well, and has taken action to improve the poverty situation. Thus, the issue is not one where the Government is not trying to do the right thing, but HOW a Government can be effective in combating one of the most significant consequences of Capitalism.
There are many brilliant people in China, and in China Government. It will be very interesting to monitor the Government Policies to see how they try to solve this problem, where the West has failed.
Is it even possible to resolve the Wealth Divide Problem in a Capitalist Society? Only time will tell.
The consequences of a persistent, significantly Growing Wealth Divide, is an ever increasing risk of political and social instability. And, political and social instability tend to result in a lot of negative unintended consequences.
Thus, it is crucial that not only China, but the rest of the world, especially the Developing Countries, act to manage this potentially destructive consequence of Capitalism from becoming a significant Driving Force shaping the future of the nation.
The consequences of a persistent, significantly Growing Wealth Divide, is an ever increasing risk of political and social instability. And, political and social instability tend to result in a lot of negative unintended consequences.
Thus, it is crucial that not only China, but the rest of the world, especially the Developing Countries, act to manage this potentially destructive consequence of Capitalism from becoming a significant Driving Force shaping the future of the nation.
Best wishes,
Ooi
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