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Thursday, November 06, 2008

China and other countries that should grow richer; from Canada to Scotland


China photo by Thomas Kraus

1. China

Five years ago, US and UK companies occupied most of the positions in the top 20 of Forbes Global 2000 survey of the world's largest companies (market value).

In 2008, the US and UK hold only 11 of the top 20 positions.

China now has 4 positions on the top 20 list.

US and UK consumers have large debts. Many Chinese have lots of spare cash.

China now has both an industrial economy and a service economy.

China can now produce top class magnetic levitation trains and top class mobile phones.

Chinese container ship unloading its cargo at Jawaharlal Nehru Port, Navi Mumbai, India. http://en.wikipedia.org/wiki/Image:Jnpt.jpg


Have a look at http://www.baidu.com/ which is a Chinese rival to Google

China has vast reserves - its foreign exchange holdings are more than $130 billion.

In the first five months of 2008, company profits rose almost 21%.

The USA is a less important trading partner than it was.

Only 10% of China's exports go to the USA.

China is now less dependent on exports as it has a wealthy home market.

China is investing a large part of its huge reserves on building ports, airports, roads and other infrastructure.

There are problems (China - Instead of Decoupling - is Crashing, Further Hurting World Economy); GDP growth has slowed but is still high at 9%; Some banks and some businesses are experiencing the sort of problems found in the USA, but China, with higher savings than the USA, is still in a much stronger position than most.

China has the money to pay for a stimulus package. 'Radical' economic stimulus package in China soon: state media





2. Oil could make certain countries, such as Scotland, very rich.

Distinguished finance and business writer Edward Russell-Walling, in an article in Baillie Gifford's 'Trust', Autumn 2008, writes:

"Many now believe... it probable that a barrel of oil will cost $200 by the end of the decade."

The reason is that demand will outweigh supply.

Russell-Walling continues: "In the years ahead, oil and gas could remain the best haven for investors, since companies with reserves will have even more value than they do now..."

This means that countries with oil are in a strong position.

That means countries such as Russia, Brazil, Venezuela, Libya, Iraq, Iran, Canada and Scotland.


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