Welcome to the Year of the Rat
February 7th was the first day of the Chinese New Year. The second day is the day in which people of Cantonese descent open their businesses and pray for luck in business. From Wikipedia:
The Rat (Chinese:?) was welcomed in ancient times as a protector and bringer of material prosperity. It is the first of the 12-year cycle of animals which appear in the Chinese zodiac related to the Chinese calendar. Rat is associated with aggression, wealth, charm, and order, yet also associated with death, war, the occult, pestilence, and atrocities. The Year of the Rat is associated with the earthly branch symbol ?.In Chinese, the word ? may refer to either the rat or the mouse. Therefore, in this context, Year of the Mouse and Year of the Rat are interchangeable terms.
Quite a diverse group of things for the rat to stand for. Investors in the Chinese economy recently have probably related more to the darker elements that rat represents than the others. Over the past three months, the Xinhua Chinese 25 Index (FXI) has trended steadily downward, as have most Chinese stocks. FXI soared in 2007, but since hitting a high of 219 on Halloween, the index has given up $75 off its share price. Has the bottom been reached? It is anyone’s guess at the moment, but the Chinese economy overall continues to grow, and forecasts predict another double digit year.
TheStreet.com straddles the fence on the issue, saying that investors can count on the Chinese government to prop up failing businesses in event of a crisis, but wonder if some hard times are on the way. Most investors feel that the Chinese story (all 1.3 billion) is a recipe for strength and a huge untapped market, due to have a middle class the size of all of the United States and Europe. On the other hand, will the growth happen too fast, not giving the country the time needed to build a firm base on which to stand. Only time will tell.
Investors in China are hoping that all those prayers for prosperity will be heeded, and the Chinese economy will revert to its 2007 growth.
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