Like other countries, China is pumping government money into its economy. Many investors believe their companies will benefit from the surging economy in the world's most populous country, even if the U.S. continues to struggle.
But is China doing it right? An article yesterday by Bloomberg News explores whether a high-speed passenger rail project indicates misplaced priorities:
Some economists say the high-speed network is symbolic of a stimulus program that places too much emphasis on infrastructure spending and not enough on raising living standards in a Communist country where the average urban worker made 28,898 yuan last year, a tenth of the $39,653 average wage in the U.S., according to data from the U.S. and Chinese governments.
In April, Fool Jennifer Schonberger picked out China-based companies focused on providing materials or services that could aid in China's infrastructure build-out. Her list included Aluminum Corp. of China (NYSE:ACH), China Petroleum & Chemical (NYSE:SNP), China Precision Steel (NASDAQ:CPSL), and ShengdaTech (NASDAQ:SDTH). Meanwhile, Bombardier and Siemens (NYSE:SI) have contracts to help build the high-speed rail.
How much brain-time should investors in these and similar companies give to how China's government might shift the flow of money?
Sound off in the comments box below. For each post, the Fool will donate $0.10 to the Thurgood Marshall Academy in Washington, D.C., in furtherance of financial literacy.
