"Go long China now. Same reason we always say don’t fight the...

"Go long China now. Same reason we always say don’t fight the fed. They’ve just done what the USA does in turmoil."

I recall your post of some 6 weeks ago which was effectively a SELL -BANKS; BUY-BHP call, which has turned out to be correct, so far.

But I don't think China is going to be the catalyst that propels the BHP share price to new heights.

The structure of the Chinese economy is changing: having been driven by investment in infrastructure and other construction over the preceding two decades, the Chinese economy is increasingly being driven by domestic consumption and services.

So, while industry and manufacturing will obviously remain a significant component of the Chines economy, the growth vector in the economy is being dominated by domestic consumption and the services sector.

Which this where this latest economic stimulus package is targeted, i.e., it's a liquidity injection into China's capital markets to support consumption, as opposed to direct state expenditure on infrastructure (which is where all the coal and iron ore gets used).

So, only a fraction of the US$285bn stimulus package will make its way into the part of the Chinese economy that BHP services.

Besides, in the context of an 18 trillion US dollar economy, a US$285bn liquidity injection is not overly material.

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