One of the most important value markets on the planet right now is in China. The trade war led by the United States and the White House has been aggressive and unyielding, pitching tariffs like 90 mile an hour fastballs at the Chinese marketplace.
And, as a consequence, Chinese asset prices have been beaten down over the past six months. The Shanghai Index has dropped over 30% in that time.
The net result of all of this? A powerful and defining market opportunity for investors looking for growth. One of the most important consequences of the trade war thus far is new stimulus measures coming into China that are set to take hold over the next few weeks. This includes major tax cuts, large government investment, easier terms on lending, and big fiscal stimulus programs.
At the end of the day, the trade war may ultimately lead to faster growth in China.
The China Boom Continues
You see, China still offers the fastest growing large market opportunity on planet Earth. At this point, the Chinese economy is now second only to the United States. However, the growth rate in China is 50% faster than the growth rate in the United States. The reason for this? China is still a growth economy. The Chinese population is more than six times that of the United States. And at the end of the day, the most important driver of growth in an emerging economy is population.
As China becomes more and more integrated into the “first world” economic system – legally, financially, and technologically – we will see this growth rate potentially even pick up more. Regardless of the economic and trade policies of the White House, China will still surely become the biggest and most powerful economy on planet Earth sometime within the next decade.
This is a function of simple arithmetic. And investors still have plenty of time to get involved now and ride this freight train higher.
There are a number of different ways to participate in this growth juggernaut. Probably the best methodology for participation is still small, undervalued stocks that have leverage to the growth themes that are most important in this narrative of the overall Chinese boom.
Bet on Materials
Infrastructure is still a critical part of this equation, suggesting that investors may benefit most from getting involved in companies that produce the resources that are necessary to further carry out the development and establishment of critical Chinese infrastructure.
One such example is Asia Broadband Inc. (OTCMKTS:AABB), a small-cap player that. through its wholly owned subsidiary Asia Metals Inc., is focused on the production, supply and sale of precious and base metals, primarily to Asian markets.
The Company utilizes its specific geographic expertise, experience and extensive industry contacts to facilitate its innovative distribution process from the production and supply of precious and base metals in Guerrero, Mexico, to our client sales networks in Asia. This vertical integration approach to sales transactions is the unique strength of Asia Broadband and differentiates the Company to its shareholders.
