Editor’s Note: This is one part of a series of stories looking at the top stock market stories since 2000.
Business news stories from 2005 – when viewed from the future – cover a wide number of topics, however one word seemed to denominate the year: China.
Business news stories about the “emerging” China market seemed to foretell coming events.
China’s quasi-Communist, quasi-capitalist economy was capturing the attention of many in the media who were waking up to a fact U.S. businesses discovered years before – China’s economy will continue to grow at a fantastic rate.
The reality that China could potentially dominate the global economy had already settled in on some business, government and media leaders.
Others, in denial and hanging on to the unfounded belief that no economy could replace the U.S. business machine, chose to ignore the huge potential market for all manner of goods and services.
China is growing a middle class with money to spend and designs on the same symbols of success as Americans: a nice home, a car, all manner of electronic tools and others markers of success.
With a population more than three times the U.S., China’s spending prowess began to be apparent to all but the most stubborn.
Certainly, China has as many problems as opportunities. Traditional culture is giving way to more “Western” ideas.
However, the potential spending power of China’s growing middle class makes it the most attractive prospect in the global economy.
China’s population of more than a billion people cannot be ignored and 2005 was another year of advancement for the Chinese economy.
Following close behind China in many ways is another market in excess of a billion people: India.
What Did We Learn>
U.S. businesses, political leaders and media need to wake up to a new global reality.
The U.S. is in danger of falling off its perch on the top of the economic food chain.
The recession and market crash of 2008-09 further emphasized how quickly an economy can go from boom to bust.
We can either partner with the Chinese economy or fight it.
The global economy will not always defer to the U.S. My suggestion is that China as a partner is safer than China as an enemy.
The Market in 2005
If the market seemed flat in 2004, it was even more so in 2005.Look at the table below and pay particular attention to the difference between the opening level of the indexes for 2005 and the closing mark.
Based on these values alone, one could conclude not much happened in 2005.
Previous stories:
Stock Indexes Dull in 2004, But Gasoline Tops $2 per Gallon
Stock Market in 2003 Set Stage for Later Crisis
Deep Bear Market Begins to Turn in 2002
Attacks, Scandal Rock Stock Markets in 2001
Dot.com Collapse Heads Stories from 2000
Major Index Information for 2005
| 2005* | |||||
| Index | High | Low | Swing | Year Start | Year End |
| DOW | 10,940 | 10,012 | -928 | 10,729 | 10,717 |
| NASDAQ | 2,273 | 1,904 | -369 | 2,152 | 2,205 |
| S&P 500 | 1,272 | 1,137 | -135 | 1,202 | 1,248 |
| *Index information adjusted for dividends and splits Swing is the difference between the high and low closes for the year |
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