The solution to the problem is to expand on the only foreign investment service that is currently available and then gradually allow foreign fund management companies to enter the RMB based investment market in 2007. This is exactly what is going on. Government policy makers should be commended; China is in good hands. Expanding Forex trading options is the first step; new services are discreetly making their way into the market place. Just recently a major US currency trading company was given a license to operate as a foreign enterprise in china and one of their brokers, www.21cnfx.com , was the number one earner in all of Asia . They earned a 15.75 percent average for their Chinese investors in the month of October, 2005. Although this return looks impressive, Liancheng Zhang warns potential investors that Forex trading is subject to considerable fluctuation and is best evaluated on a year by year basis, not month by month. When Mr. Zhang traded for European banks they expected a 15 per cent return for the year and they were satisfied when he reached their target. New Forex investors often need reminding of this fact.
The Forex business is nothing new, even to china, but the ability for Chinese investors to use leverage is new. Wall Street Forex (WSFX) is one of 30 independent brokers offering leveraged trading on an American platform. Clients can open bank accounts in America and then trade or let WSFX trade their account provide they deposit $50,000 USD or more. During periods when real estate is peaking and stock markets are not yielding positive returns forex trading is one of the only ways to grow wealth. The current real estate vacancy rate in China stands at 26 per cent, that's 8 times greater than Hong Kong's vacant buildings; this over supply will have to be balanced by falling prices. As for the stock market, well, if you're a real investor, you know that story. The wealthy have always turned to two key money growing strategies when faced with situations like this current investment dilemma: hold gold and trade currencies.
By Brad Nixon, Canadian Market Research Analyst
Ba Economics, university of Calgary , Canada . |
