Where To Invest In The 2020s

If there’s one thing I have learned during my years of living in China, is to never underestimate how well the government can execute their economic vision.

Why Would China Undertake Such A Capital-Intensive Program?

To understand why the Chinese government wants to take on such a massive project, probably the largest infrastructure project in human history, it’s best to understand their reasoning.

As a result of the incredible growth in China, the standards of living have increased as well, and so have wages. Labor is becoming increasingly more expensive, yet the country does not want to lose its position as the world’s manufacturing hub.

The BRI is building an ecosystem that includes neighboring economies to have access to lower labor costs, in an effort to maintain the world’s manufacturing opportunity. Of course, there are many more reasons than just lower labor costs, but that would make this article too long.

The important thing to think about is that the BRI is about the next wave of growth for Asia, and China is just the middle stage in the project. There are 2.5 billion people in Southern Asia, with younger average age and a higher growth rate. The empowerment of this entire region will fundamentally change the world economy.

Thought Differences With The West

Understanding business and culture in the East is not easy, hence why I want to give you a few simple examples of traditional thoughts that have become outdated, as well as key fundamental differences in approaching business.

Publicly listed companies in Western countries frequently have a focus on next quarter’s earnings and maximizing shareholder values. Most public companies in Asia are either state or family-owned. This is important as the latter has a greater focus on top-line growth and its long-term vision.

The old Asian strategy of copy-and-improve is long gone. As of right now, China has the largest and best online infrastructure in the world. It’s technology companies have become the leaders in mobile payments, social networking, artificial intelligence, mobile networks, and quantum computing.

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