Hard landing alert: China's inflation rate is dropping, but analysts expect it's for all the wrong reasons. Is China cooling more quickly than expected?
China, which is planning to slow growth, might take pleasure in the 14-month low inflation rate, but analysts point out it is international forces that are slowing it down more than internal events.
"Curbing inflation is a good thing, but the reason why inflation is slowing is because the global economy is slowing," said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. "If you see that fact, you can't be so optimistic." (via Bloomberg)
In response, China will likely signal "a cautious approach" to further easing in the short term. "The money tap will be loosened, no doubt," said Stephen Green, a Hong Kong-based economist with Standard Chartered.
The largest outside forces that affect inflation of the Yen include the eurozone debt crisis and falling investment in Chinese property due to tightening measures.
Do you think China is in store for a hard landing?
Investors are getting anxious about Chinese investments -- are they still a good idea? To find out what sophisticated investors are doing we decided to screen a universe of Chinese stocks for those with significant levels of institutional buying.
Institutional buying (net purchases from mutual funds, hedge funds, pensions, and bank trust departments) signals that sophisticated investors believe there is more upside than downside to the names.
The "Smart Money" feels confident about these names -- do you? (Click here to access free, interactive tools to analyze these ideas.)
1. Isoftstone Holdings Limited
2. E-Commerce China Dangdang
3. Home Inns & Hotels Management
4. China Kanghui Holdings
6. Simcere Pharmaceutical Group
7. Ctrip.com International
8. Ambow Education Holding
9. Shanda Games
10. Giant Interactive Group
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Institutional data sourced from Fidelity.