This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Multinationals Expect Gains With China's New Leadership

"Political power transition will remain an overhang until the final list of Politburo is announced or confirmed," says Joseph Tang, investment director at Invesco in Hong Kong. "The political infighting will remain a hurdle for the central government to come up with quick and effective policy initiatives in tackling the current economic problems."

Those policy initiatives will push ahead with the 2011-2015 five-year plan for elevating domestic consumption as a driver of GDP growth. Healthy consumption would reduce China's dependence on exports to countries with waning demand.

Policies that raise consumption will in turn increase the sales of foreign companies that sell en masse to the masses. No-brainer beneficiaries will be firms that are well-entrenched in China. They're the ones that have sunk money into the country. They know who to pay off, how to avoid scams and what to do with their inscrutable Chinese joint-venture partners.

How about Procter & Gamble (PG)? P&G reports annual China sales of $2 billion with a "No. 1 market share position in all categories where we compete." That means Chinese are hogging up Rejoice, Safeguard, Olay, Pampers, Tide and Gillette, according to the company's immodest website. P&G also claims a No. 2 position in volume.

P&G share prices are at their second highest point in history, however, and analysts suggest holding any that might be in your portfolio. To buy, wait for China to launch pro-consumer policy and then for an unrelated dip in share prices that would turn positive again on China sales.

On another supermarket shelf, check out PepsiCo (PEP). In July it announced the opening of its sixth greater-China plant, a 25,000-square-meter fab that can make up to 15,000 tons per year of its signature Lay's potato chips.

The company also picked a local partner this year to smooth drink sales and distribution. PepsiCo stocks have climbed steadily since the global financial crisis in early 2009 and buying more is still recommended.

But the government knows its consumers aren't rich or loose enough to replace investment in the short term, so the new leadership will keep fueling the twin all-weather growth engines of infrastructure spending and huge real estate projects.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,055.87 -116.81 -0.68%
S&P 500 1,982.77 -11.52 -0.58%
NASDAQ 4,508.6880 -19.0010 -0.42%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs