From the latest edition of U.S. Global’s Weekly Investor Alert If there is any doubt about China’s role in the global growth story, the chart above should clear things up.
Going back a decade, China has consistently been a major source of growth in infrastructure and other construction. The gap between the green line and the red line in the chart from Macquarie represents how much China has added to global construction.
Ex-China, the year-over-year drop in world construction was nearly 30 percent at the 2009 bottom – since then, China has been the heavy lifter in getting the trend back into positive territory. This second chart also focuses on the China growth story, this time showing the breadth of wealth creation within its dynamic economy.
It’s not a surprise to know that luxury products from Cartier, Gucci, Louis Vuitton and Hermes are available in Shanghai, Beijing, Guangzhou and Shenzhen, all key financial, political and manufacturing centers in the eastern part of the country.
But the demand for these types of high-end goods extends deep to second- and third-tier cities in the Chinese hinterlands – as far west as Urumqi in the oil-producing Xinjiang region, south to industrial Kunming in Yunnan province and up to the trading center of Harbin in the northeast corner.
The government in Beijing has been working to spread the nation’s economic prosperity westward, and if this is any indicator, it is having some success.
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None of U.S. Global Investors family of funds held any of the securities mentioned in this article as of December 31, 2009.