What you need to know about the instability of China stock market

Stock Market Workers
Stock Market Workers

If you’re a stateside investor or involved in any international affairs, you may be feeling anxious about the state of the China stock market. Recent reports have proven how unstable their economy is and that there may be some underlying corruption that will eventually catch up to their stock investors. By examining the past mistakes of the China stock market, the latest statistics of China’s stock market activity, and the current benefits of investing in precious metals, you can feel like you’re in a secure financial spot once more.

Corrupt Data in the China Stock Market

While being known as the most populated country in the world, China’s market has always seemed well maintained and reasonable. This however, is just a ploy to draw in more investors and avoid addressing important GDP issues. Their source of the Chinese stock market corruption derives from its officials; recently the head of the National Bureau of Statistics, Wang Baoan, was placed under investigation for an alleged ‘violation of discipline’. But the history of China’s lower-profile economic data goes even further back with disappearing data, dishonest methods, and economic deviations.

China’s official economic record-keeping agency, National Bureau of Statistics (NBS) has published incorrect information time and time again.They don’t release a nationwide figure, nor do they release other statistics publicly so that investors could deduce a nationwide average. Their most severe fabrication occurred in the years of 2008-2009 where many of their Q4 reports simply vanished, just as the global financial crisis hit China and the rest of the world’s economy. It’s suspicious behavior such as this that enforces you to take other measures to keep your finances safe.

Recent News on China Stock Market

Not only has China had a bad history with fabricating statistics, but their current ones aren’t that impressive either. After recent oil prices dropped, Chinese shares have dropped more than 6% and industrial activity, fell 11.9% by volume last year, despite Beijing claiming a 7% GDP growth. The CSI300 index of the largest companies in Shanghai and Shenzhen dropped 6% to 2940.51, approaching its lowest figure since the beginning of December 2014. China’s stock markets have now collapsed about 22% since this year began. With distrust in this country’s crippling debt and half-truth claims on fixing their economic rates, it makes sense for investors to seek other ways to make profit. But the question remains: what’s smart to invest in?

Investing in Precious Metals

Keeping your funds in a constant rate of growth requires you to take action immediately. In recent years, investing in precious metals has proven to be the most economically safe way to provide capital for your financial growth. The US Dollar has showed consistent patterns of declining over the years, whereas gold and silver has remained more valuable. Important infrastructures like The Federal Reserve and Central Banks all over the world, buy gold to protect themselves. In fact, Central Banks have purchased more gold in the 4 years from 2009 to 2013 than they did in the 46 years between 1962 and 2008. This is because gold has remained the most effective store of wealth while the dollar continues to decline year after year, and the citizens of the United States confidence wavers in its country’s ability to pay its debt. History has proven that precious metals are a wise investment and are less likely to fluctuate as harshly (and inaccurately) as investments in the Chinese stock market.

Reprinted with permission by David Fischer at Landmark Capital.

Photo credit ReynerMedia

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