Do you have a good understanding of China? What about as an investment opportunity?
The idea that China is mostly low-cost manufacturing industries, with sweatshops and copycats, no longer holds true. A few facts to know:
China has the second largest economy, and soon to be the largest
The second largest stock market
An economy generating 50% of GDP from the services sector
The most advanced manufacturers of personal drones, robots, and speech recognition software
The largest middle class with over 550 million people by 2022
There are four trends moving forward in China to consider.
China is becoming more efficient with the development of technology. Everything from travel and immigration to transportation is improving with the use of artificial intelligence.
The language barrier is closing, quickly. The Chinese population is adapting to a shifting economy with more becoming comfortable speaking English. Restaurants, entertainment, train stations, and other activities are all becoming accommodative for the English language.
The Internet is not as restricted as you might think. It is true China bans foreign internet companies like Google and Amazon, as well as monitoring all of your Internet traffic. However, it isn’t too difficult to bypass these restrictions with a Virtual Private Network (VPN) or even prepaid SIM cards with built-in VPNs. Although Beijing might make it difficult to access the Internet freely, it isn’t impossible.
The Chinese stock market is getting a boost. As the Chinese role in the global economy has grown, the money flowing into the Chinese stock market has grown significantly. MSCI, the world’s leader in equity-based indexes, recently quadrupled the weighting of its China-listed stocks in its global indexes, resulting in as much as US$125 billion of new funds flowing in.
Source: Brian Tycangco
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