The Spark That Ignites the Tinderbox

Keith Fitz-Gerald Reporting “Live”
From China!

“Chinese consumer spending is expected to outpace the Americas, Japan and the Eurozone combined in 2009 – and the average Chinese still saves 35% of his income.”

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“The US economy is 70% or more consumer spending. In China, the number is closer to 35%. Imagine what happens in the next few years as China catches up!”

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“China will spend its $2.1 trillion in cash reserves (largest in the world) regardless of what happens in the West. This will lead to an economic decoupling few investors are prepared for.”

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“Chinese brands are outselling global brands just with sales inside China. China’s Snow Beer has exceeded Bud Light as the world’s largest beer vendor.”

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“History suggests the most profitable times to invest coincide with the state’s investment cycle. That includes things like infrastructure, clean energy, and power.”

No country in the world has been more AGAINST the People’s Republic of China than Taiwan.

For 60 years, Taiwanese companies have invested hundreds of billions of dollars into mainland China (about $77 billion since the late 1990s), according to the Asian Wall Street Journal.

But mainland China has been barred legally from investing in Taiwan.

Yet earlier this year, Taiwan opened its arms to China. New accords allow mainland firms to invest in the island – for the first time in 60 years!

What brought about this change in regulations, if not in heart?

Taiwanese business leaders, including president Ma Ying-jeou, are hoping cash-rich China can SAVE their over-leveraged and under-utilized economy. (Other countries feel the same way.)

For example, Taipei 101 Tower, once the tallest building in the world, was built as a symbol of Taiwan’s economic prowess. But until recently, it’s been a colossal white elephant, standing less than 50% occupied.

Now, thanks to the new accords, mainland companies like Lenovo, Tiens Group Co., and Sinosteel have moved in. According to the Wall Street Journal, the building is more than 80% occupied and rents have risen by 5-10% in anticipation of more high-brow Chinese clients.

Mainland Chinese delegations have already inked some $68 billion worth of deals in various industries. In April, for example, China Mobile Ltd offered $527 million for a 12% stake in Taiwan-based FareasTone Telecommunications.

According to the Taiwanese Tourism Board, the number of mainland Chinese visiting Taiwan jumped three times over last year. The number of direct flights increased by 150% from 108 to 270 per week.

Guangzhou-based China Southern Airlines submitted the first bid under the new regulations to invest in Taiwan. By the end of the day, three more aviation companies had joined the race for the potentially lucrative new routes between Taiwan and China!

Can you smell blood in the water? Keith can. When Taiwan opens its arms to China, the rest of Asia – indeed the rest of the world – is not far behind. That’s why we fly Keith to China four times a year so he can sniff out the biggest and best of these new opportunities.

Like this one…

Your Lifetime Buying Opportunity #4

Imagine you could go back in time and invest in the American automobile, oil, or railway industries when they were just getting started. You’d be launching your family’s fortune.

A Warning from a Legendary Investor…Last year, world-class, globe-trotting investor Jim Rogers warned: “Selling China in 2008 is like selling America in 1908.” Rogers walks the talk, too. He picked up and moved to the Far East, lock, stock, and barrel to be near the action. And he’s making sure his daughter learns Mandarin.

Well, with China, you can. Buying China now is like buying America…back in 1900. In fact, the similarities are downright uncanny.

Like the U.S. once did, China is using rail to build the country.

Almost all China’s growth is along its eastern coastline. It’s using railroads to move massive amounts of resources and people from the prosperous east to the growing west.

According to the Chinese Railway Ministry, there is a shortage of rail capacity to carry raw materials from China’s western provinces to manufacturing centers on the east coast.

Problem is, rail capacity is only 35% of demand.

That’s why Beijing is preparing to invest $200 billion upgrading and expanding her rail capacity. That’s a 400% increase on rail capacity spending over the previous 5 years.

And with the Chinese Central Government calling the shots, there won’t be any foot dragging or partisan political bickering to slow things down. The money will be spent and the job done.

Which is great news for your Lifetime Buying Opportunity #4 – a Chinese passenger and freight railroad.

Here are the salient facts:

  • It carries freight and passengers through Guandong Province and connects the northern and southern railways of China. It’s the only railway linking Hong Kong with inland China.
  • One of China’s most modern railways, it’s the first with four parallel lines to allow passenger and freight trains to run simultaneously on separate lines.
  • Its high-speed passenger trains are dispatched every 5 minutes in peak hours to achieve “as frequent as buses” service.
  • Its expanded national network connects ports, logistic bases, building materials markets, large factories and mines.

Even with soaring fuel costs and weakened demand in 2008 the company reported a 16.6% quarterly earnings growth. And sales grew an average 47.45% over the last 5 years.

As China pulls out all the stops to meet the demands of a growing middle class, the Central Government will spend big on rail to move 600 million people toward their dreams.

Your profit target on this one is… 356.1%

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