The “Tiregate” Scandal Can’t Derail This Growth Story…

by Robert Williams, Publisher
Thursday, September 24, 2009

The 35% tariff that President Obama just slapped on Chinese tire imports is not sitting well with the nation’s top brass, notably President Hu Jintao.

Chinese officials say that the tire decision represents a dangerous precedent toward protectionism and against the notion of free trade. They’re even threatening to “re-evaluate” their position on U.S. imports, like automobiles and poultry.

But Tiregate is more about the United Steelworkers union – the dominant force in U.S. tire plants – than anything else. The union is a pivotal ally in Obama’s fight on healthcare reform.

As such, I expect the spat to resolve itself at the upcoming G-20 summit in Pittsburgh. So don’t let this tit-for-tat derail your long-term investment outlook on China.

The rise of the middle class, predicated on steadily increasing income levels, will continue to serve as China’s growth catalyst.

Add in the fact that the Chinese economy is likely to grow by 8.9% next year – sharper than the 8% growth projected by the Asian Development Bank in March – and the country’s long-term investment appeal remains airtight. (Read Louis Basenese’s short-term China outlook here.)

Our analysts are tracking the region. Stay tuned for the best ways to play the next phase of China’s growth.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… C: wait…

• An Australian Dollar Play on China’s Growth
• Jim Rogers: China Still a Buy
• China Overtakes Germany – Economically

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