The China miracle is back on track, and with it comes speculation for resource demand as a result of huge economic growth. Within the oil sector, the coal group has seen big gains given its use in power generation. In China, that is particularly true, with the country seeing new power plants open on a regular basis.
Yanzhou Coal Mining (NYSE: YZC) appears to be in the sweet spot. Investors seem to agree and have pushed YZC up almost 70% in 2009. China is an appealing play, but by no means certain.
The country is highly dependent on exports, and with the United States still struggling with flat to negative economic growth, the China miracle may be delayed again.
We have seen violent moves in oil and China over the last year, and there is nothing apparent to suggest that volatility will end. As such, it makes sense to lock in gains on Yanzhou and sell this China stock now.
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