Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

China Infrastructure Growth: It's Not About Beijing 2008 Olympics

Stock-Markets / China Economy Dec 23, 2007 - 12:25 AM GMT

By: Chip_Hanlon

Stock-Markets

Stop it! Please just stop.

I saw it yet again yesterday: another commentator talked about how China 's economy should keep chugging along through the 2008 Olympics in Beijing , particularly its appetite for commodities due to its infrastructure needs ahead of that event. Sometimes I hear it said that the trend might last through 2010 and the World Expo in Shanghai for similar reasons.


Please.

Maybe it is because we here at DGA are so deep into the research on this topic due to our new Basic Needs and Basic Services global infrastructure portfolios that the ‘2008 Beijing Olympics' argument drives me so crazy. In fact, the emerging market infrastructure story is so big and so long-term that the only way to forgive those who advance such argument is to conclude that the numbers are almost too large to wrap the mind around.

Consider:

•  A close look at IEA figures shows that it estimates China will have to spend nearly $4.5 Trillion on energy infrastructure alone between now and 2030.

•  China is already a net importer of soybeans, interestingly. Before the end of this decade, it will become a net importer of coal for the first time, as well.

•  Despite a penetration rate of approximately 12% (versus our 70%), Asia already claims 200 Million more internet users than North America .

•  To meet its future needs, it is estimated that China still must install electrical-generating capacity greater than all of what currently exists here in the U.S. , to say nothing of the nation's road, port and water infrastructure needs.

And this is not just a China-related story: Russia recently stated its intention to spend nearly $200Billion on its energy and rail sectors by 2011 while India, whose shoddy infrastructure may be costing it fully 2% of GDP, has recently stated its intent to vastly increase its own infrastructure spending, nearly doubling it over the next five years. Meanwhile, smaller Asian nations and the GCC countries are pursuing similar courses to support their booms.

As we have been spending, other nations have been saving; not only is this resulting in a massive, global transfer of wealth (think: China's investment in Morgan Stanley yesterday), but those savings are also being put to the productive use of building out infrastructure in developing economies around the globe.

Does the U.S. economy stand today at an elevated risk of recession? Sure. If we experienced a severe economic decline, would that impact other nations, as well? Of course, and arguments to the contrary are silly in our estimation. That said, any near-term economic or stock market dips can scarcely put a dent in the long-term infrastructure story taking shape in emerging markets.

Here at home, we're also witnessing a budding infrastructure story, thanks in large part to the awful bridge collapse in Minnesota earlier this year. However, that story is at least partly a political one which may fade after next year's elections. At the very least, we are unlikely to see funding which reaches anywhere near the level of the projected need.

In emerging economies, however, infrastructure is not a matter of choice, but of need. Build it or stagnate. Build it or risk political unrest. Build it or become less competitive than your neighbor. And again: they have the savings to do it.

So please just ignore the ‘ Beijing ‘08' story about China 's growth. We'll all be talking about the infrastructure needs of China , India and other emerging societies for many years to come.

Chip Hanlon
President
Delta Global Advisors
Phone: 800-485-1220
www.deltaga.com

Chip Hanlon focuses on foreign equities, currencies and commodities. He is currently the president of Delta Global Advisors, an SEC-registered investment advisor with more than $1BB in assets under management. Previously, he was the C.O.O. and chief U.S. strategist for Euro Pacific Capital, president of Unfunds, Inc. and vice president of investments and syndicate director for Sutro & Co. He is also a contributing writer to Green Faucet and to Real Money, the subscription service of thestreet.com

Chip Hanlon Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Mike
23 Dec 07, 19:11
Beijing Olympics 2008

I spent 3 months in Beijing this year. The last time I visited was more than 10 years ago. The change in the city is not surprisingly, massive. The Olympics really has been a catalyst for growth and population migration that will have a medium to long term effect on the city.

http://2008gamesbeijing.com


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules