Wednesday, April 11, 2012

CHINA NEW INVESTMENT OPPORTUNITIES


An economy which has shown the world that it can grow despite of any one dreamt about its success can never fail in the long term. Its base is made of strong policies and moreover policies derived from historic mistakes of others. I am hearing from the last 2 months about the recent downslide of Chinese economy and criticizers mainly from the US and European economy throwing pots and pans towards Chinese economic growth prospects. I find they are trying to draw major attraction from downsizing the Chinese growth and uplifting their own economic prosperity. China has always found new areas of investments and is keenly developing relations for trade and investments at a time when the US and Europe is busy to handle their economic stability.

New Investments.China is doing another huge turnaround for its domestic industry. Under the 12th plan Chinese Aviation industry will undergo a huge turn around boosting investment opportunity and flow of capital to China’s mainland streets. By 2015, China will construct 70 new airports, relocate and construct 15 airports and re-construct 101 airports, and China will import more than 300 planes every year. Well all these promises are not Indian promises. China knows where the growth lies. It has earned forex reserves through extensive export and earned the crown of World No.1 exporting country now that same economy is going to chase its dream to build its domestic economy.

Well one cannot build himself unless one has enough liquidity in his own hand. China has earned that liquidity through export and now its going to attract again the flow of capital back to its own economy via development of the domestic economy. By the end of the 12th Five-Year Plan, China will convert its major base airline companies in Shanghai into large-scale network airline companies with international competitiveness. This will further lead to a central operation network taking Shanghai as the core hub. China will turn the Shanghai Pudong Airport into an international airline hub with quite strong competitiveness and also the core airline hub of the Asia-Pacific Region, and the number one international air freight hub in the world.

Well one can simply calculate the volume of capital that will flow into china for building this dream and china never fails in its growth plans, hence the chances of faltering are less in Chinese Aviation investment. I don’t need to discuss about the other related industrial growth that will come from this one singular industry of China. Neither I gave any figures of historic investments growths being achieved by China. History has nothing to do with the upcoming new investments and GDP growth.Hence one can clearly envisage the growth prospects and flow of capital China will get in the coming years. Now I think my readers can understand why US and Europe is busy in down grading the growth prospects of Chinese economy. Nothing but to stop the flow of capital for China which US and Europe need in their own breeding.

New Trade Relations.
Among all these china is continuously exploding new relations to diversify its forex reserves. China very recently is going to do huge investments in Turkey. China has changed its taste of investments from the past 2o years old proven industrial base of investments. China is exploring new investments areas where US and Europe have failed or neither have identified. The new areas where China is doing investments in Turkey are emerging fields like new energy, space exploration, energy conservation and environmental protection. Nuclear energy is also one of the strongest investment areas of China’s trade pact with Turkey. Two agreements, including a letter of intent between China's National Energy Administration and the Turkish Energy Ministry for further nuclear cooperation, were signed. China is edging ahead in the international contest to build a nuclear power station on Turkey's Black Sea coast.

China is Turkey's third-largest trade partner. Data from China's Ministry of Commerce show that bilateral trade increased by 24.2 percent to $18.74 billion in 2011.One of the prime reason for doing such an massive investment plans and deals in Turkey is to bring out Turkey from the trade deficit it has on its economy. The trade deficit stood at $19.23 billion in 2011, up 28.9 percent year-on-year. Hence China find immense opportunity to turn that trade deficit into an trade surplus over the next decade.

Economic Cooperation and New Upcoming Chinese Investment Areas.
We read books about economic cooperation and we even find many notes lectures being given on this topic. But the real application is being adopted by china and now we don’t need to look into historic examples of economic cooperation and development. Before I end up I would like to reveal one truth about China economic growth. Dont expect china to deliver astronomical GDP growth in the next decade. Slow but Steady should never be forgotten. Last year, China’s Premier Wen Jiabao told the country that the government’s target for growth over the next five years was 7.5%. China’s economy grew over 10% throughout the mid 1980s to mid 1990s before suffering from the Asia Tiger crisis in 1997, when smaller southeast Asian nations faced massive debt burdens that caused entire economies to crumble. China then spent another six years growing between 7.6% and 9% before taking a new leap in 2003.Hence slow but steady is good enough than an double digit jumps every time.

China’s next destination of investments will be health care products since china is facing the problem of huge aging population and this gives it an immense opportunity of investments and development of its health care system. China is no longer the cheap labour economy. Incomes are rising, with average incomes equal to that of the U.S. back in the 1970s, and on the east coast, per capita incomes are over $20,000, making China’s chief urban centers like Shanghai more of a middle income European country than a poor one. Investors be ready for investments into Chinese health care. Once the gate opens up it might be too late to start off.

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