March 8, 2011 by David Gillaspie
An Educational Moment From The East
First ask what you need to spend.
Is it time? Money?
Is it time and money plus your life-energy, which means you’ll want a stake in the outcome?
First, ask about the money? Is there any money?
If the answer is yes, an ocean of wealth, then ask next question: where does it go?
The usual places. You find them on every newspaper’s front page. It’s education, road and bridge infrastructure, war, taxes. Big money problems ask for big money solutions.
What if the problem is bigger, like China?
An economic tornado like China shows strong on an investor’s prospectus, real strong. Do you invest in China and wait, or do you track the money.
If you’re a tracker, you want to know a few things. Here are a few things worth knowing:
Spacedaily reports Chinese plans to spend $230 billion to bump their commercial airports up from 175 to 220, and increase their aircraft fleet from 2600 to 4500 planes.
If you fly often, you know how important it is to stay hydrated. Do does China. Toward that end, Reuters reports a $30 billion push for water conservation which leads to better irrigation for high yield farm crops. It makes sense when cities grow on land once used for farming.
Bloomberg Businessweek delivers the number on Chinese defense for 2011, $91.5 billion. The number may be low due to exclusion of other expenses related to normal defense budgets, but the next one isn’t.
$1.5 trillion, reported by the AfroAsian Business Chronicle, is aimed at nuclear power and high-speed rail. If China wants to move away from it’s role as world supplier of cheap goods to become a high-end manufacturer, you can’t get there any faster than riding a high-speed train passed a nuclear plant.
One source adds, “the private investors will be given incentives such as tax breaks and low interest bank loans, with national and local governments chipping in.”
One issue that raises alerts in the China watching world is the internal security budget. For the first time it is greater than the defense budget, $95 billion for public safety versus $92 billion on military. Added together, they represent a need for for a thriving economy.
If the idea of a locked down China makes you nervous, then look at the figures from the China Daily. They report the central budget tops off at $827 billion. Finance Minister Xie Xuren said Monday that two-thirds of $827 billion is scheduled to “improve people’s livelihood in 2011.”
That’s lots of improvement and lots of opportunity for those seeking new markets with an impressive growth record. If you are in the market, you need good advice.
by David Gillaspie