G1?: China’s Latest Sign of Economic Might

44 minutes ago
G1?: China’s Latest Sign of Economic Might
Posted By:Tom Brennan
Topics:Manufacturing China Stock Picks Stock Market
Companies:Best Buy Co Inc Corning Inc General Electric
(SOURCE: http://www.cnbc.com/id/30479959)

Cramer praised China during Wednesday’s Stop Trading! for its latest stimulus push, saying that we often underestimate the country’s ability to get its economy moving when it matters most. The benefits, though, could ripple through the rest of the world’s economies as well.
“The Chinese are pulling everyone out” of this recession, Cramer said.

China has been issuing coupons to its citizens that allow them to buy washers and dryers. Now Commerce Minister Chen Deming is saying, in a “Street Signs” interview, that those coupons could soon include other appliances as well, including televisions and radios. Also, instead of allowing only rural residents to take part, China is considering opening up the program to city dwellers as well.

The plan has enormous potential, Cramer said, especially considering that the urban population numbers in the hundreds of millions, and each home contains about three televisions. China plans to encourage the recycling of those old TVs and the buying of replacements. In rural areas, all of the appliances mentioned have the potential for near 100% penetration.
“That’s why this is so important,” Cramer said.

The beauty of China’s stimulus is that, unlike the U.S. tax rebate of 2008, these coupons can be used only for designated appliances. So the money spent goes directly to the industries that need it most.

General Electric [GE 12.22 0.22 (+1.83%) ] Corning [GLW 14.85 0.16 (+1.09%) ] Whirlpool [WHR 44.32 3.26 (+7.94%) ] and Best Buy [BBY 37.53 -0.35 (-0.92%) ]
are just a few of the companies that could benefit most from this spending. The inventory glut they’d suffered through will most likely give rise to empty warehouses thanks to this Chinese demand.

“This should be the lead story” for any news outlet, Cramer said of the commerce minister’s statements, as China yet again takes the lead in a global economic recovery.
Cramer's charitable trust owns General Electric.