BEIJING - Economists use economic indicators to make predictions while masters of feng shui ("wind and water") use the eternal art of geomancy. However, their forecasts for the economic scenario of the Year of the Dragon still coincide occasionally.

A feng shui index launched by Credit Lyonnais Securities Asia Ltd (CLSA) predicts a hard year ahead with further downside risks in line with warnings from economists.

The Chinese Lunar New Year, which begins on January 23, is called a "Black Water Dragon Year", according to the traditional Chinese philosophy. The last of these was 1952, the year Queen Elizabeth II succeeded to the throne of the United Kingdom.

The CLSA report - with a dark blue dragon with colorful swimming trunks and snorkel emblazoned on its front page - offers a tongue-in-cheek look at the prospects for the stock markets and industrial sectors.

The report predicts that the Hong Kong stock market could see a slow start to the year, "with the Dragon sinking like a sun-cracked crocodile back into its lagoon". It also expects to see a sluggish performance throughout the first half of the year "with west highlighted as the best direction for money".

The report said the tipping point should come in August, as the Dragon turns swiftly and heads north at a rapid pace. September should be one of the best months of the year, having intense market activity. The sustained upward trend should continue into October and November and then the market will shuffle sideways through to the end of January, it said.

Tan Degui, a researcher in Taoism with the Institute of World Religions under the Chinese Academy of Social Sciences, said the traditional geomantic art uses the concept of "wu xing" - the five "chi", or elements that dominate at different times - to predict the economic situation.

Each market or industrial sector belongs to one of the five types of chi - water, wood, metal, fire and earth - and could each be influenced by the dragon year's watery chi, he said.

The dragon is the only legendary creature assigned to one of the 12 zodiac signs designated to each year in the Chinese calendar. In contrast with the sometimes evil image attributed to the dragon in some Western countries, in China it symbolizes auspicious powers, rainfall and unpredictability.

The most prosperous months for the financial industry could be September and November. Meanwhile, October may provide a boost for the slumping real estate industry, and December may be a good month for the transport sector, according to the report.

Tan said feng shui masters have different opinions on the "wu xing"that relate to various industries, but generally the characteristics are much the same.

The real estate industry could hit a bottom in October or November and it won't rebound quickly. The auto market could see an increase by the end of the year and it may also be a bullish year for the medical industry, Tan said, while drawing the "wu xing" of each sector on paper and making comparisons.

"The oil and gas industries are closely connected with the relationship between the United States and Iran, but I predict that war may be avoidable in 2012 and the price of oil won't rise much," he said.

In a period of economic decline, an increasing number of companies - including some international outfits - are attaching more importance to this ancient art to help them turn a profit, according to consultants.

Many souvenir shops close to Beijing's Lama Temple also provide feng shui services, but they are extremely variable and few people can really master the ancient art.

Li Zonghan, a self-educated feng shui master, said he couldn't even find a high-quality compass - an essential tool that allows feng shui masters to judge the positioning of a house and its objects - at the shops in the area.

China Daily

(China Daily 01/20/2012 page13)