Without a doubt, China looks set to be the economic powerhouse of the 21st century. And the next stage of the country’s growth draws inspiration from China’s storied past, when silks from the Far East graced the markets of ancient Rome.
From satellites orbiting hundreds of miles above the earth, it looks like a piece of tin foil in the sand…a square of shiny aluminum that marks the beginning of a massive shift in energy and industry for one North African country.
In 2002, there were only 1,300 movie theaters in all of China. Think about that: 1,300 theaters to serve more than a billion people. To put that in perspective, the U.S. had a whopping 35,688 theaters in 2002, or roughly one movie screen for every 8,000 people. China’s paltry 1,300 screens meant there was only one screen for every 1.04 million people. That’s like going to the drive-in with half the population of Houston, Texas.
Traditionally, when the global economy slows down, foreign direct investment—a key driver for emerging-market growth—dries up. And while emerging markets are the center of world economic growth right now, the World Bank and the OECD have both cut GDP expectations for next year. That could mean that emerging markets will take a hit. This being the case, you might think now would be a bad time to invest in emerging markets. And you’d be wrong. There are several hot-spots that investors shouldn’t overlook just because they are emerging markets. I’ve picked out two well-established economies that are expected to outperform their peers in 2016 and give you a tidy profit in the process.
The next big thing in Australia isn’t a new uranium mine or a natural gas field off the western coast. In fact, it’s not a commodity at all. But it’s adding tens of billions of dollars to the economy and sparking double-digit growth that you can tap.
In the deserts of western Nevada, ground has been broken on a building that, when complete, will cover some 10 million square feet. This building—which will soon be the biggest in the world—is Tesla’s Gigafactory, just outside of Reno. It’s a manufacturing plant for making car batteries and Powerwall packs, which store electricity for home use.
Within a generation, the world’s population will surpass nine billion people. Do you know how much food the world will have to grow and produce in order to feed all those hungry mouths? Right now, we produce about 3.94 billion tons of food for consumption each year, but experts say we will need 50% to 70% more food in order to meet demand by 2050. That’s a huge increase and an extremely daunting challenge.
If you were to make your way far below the icy North Pole to the seabed at a certain spot, you would ﬁnd an unusual titanium ﬂag. It’s Russian, and it was stuck there in 2007 by the crew of two mini-submarines as a symbolic land-grab that rivals anything in history. Though it’s not a “New World” that Russia and other Arctic countries are seeking. It’s new oil. And now, with the scramble for Arctic oil heating up, the abundant black gold buried beneath the ice could constitute a fantastic investment opportunity.
Over the next two years, the emerging-market scene will have a new favored son… Overall, India has been a bit unloved by international investors—never quite living up to the hype that the rest of the BRICs seem to enjoy. But that’s all changing. Favorable demographics and a businessfriendly government have set India on the path to renewed growth again.
In October of last year, China and Russia signed a landmark currency-swap deal allowing Russia to tap into $24.4 billion in liquidity. This was followed by an announcement that the People’s Bank of China would permit trading of renminbi-ruble derivatives and China’s Import-Export Bank extended credit to two sanctioned Russian banks. In other words, China’s doing what it can to help Russia keep its head above water. This is one of the greatest economic chess moves in recent history. And could be one of the greatest investment opportunities in our lifetime.