Steve,
I'm referring primarily to Foreign Corps with operations in China, most of them HK based with China manufacturing.
They've set aside monies to make low interest loans, but many of the companies won't need loans. There's what might be determined a 'kick back' to exporters that has been expanded into almost all sectors where it used to apply to a narrow group. I haven't fully gone into it, but it's like getting a tax rebate of 2% of exported sales. There are other breaks already in effect that they have expanded. There's no property taxes, no taxes on dividends, a 40% tax rebate on capital expenditures, lower utility costs, laws against anyone overcharging your company - a long list of breaks and incentives.
The exporters, except for certain sectors like clothing manufacturing and other labor intensive areas, are not hurting. It is amazing to read about the problems Chinese exporters are having and compare this to recent reports coming out with 15-70% earnings growth. Then look at how oversold the stock is. Growing companies heavy on cash with no debt selling near or below BV and PEs of 4-7.
In another post I gave the current import/export numbers and they don't indicate export weakness. Even Legacy computers is showing high growth while competitors sales are declining. (I don't own but wish I had bought earlier)
FWIW,
Ron |
