In my June 3rd blog post I suggested that Western investors would be ill-advised to ignore China's Belt and Road Initiative.
Here's a snippet:
In concrete terms, the Belt and Road initiative is an immensely ambitious development campaign through which China wants to boost trade and stimulate economic growth across Asia and beyond. It hopes to do so by building massive amounts of infrastructure connecting it to countries around the globe. By some estimates, China plans to pump $150bn into such projects each year. In a report released at the start of this year, ratings agency Fitch said an extraordinary $900bn in projects were planned or underway.
There are plans for pipelines and a port in Pakistan, bridges in Bangladesh and railways to Russia - all with the aim of creating what China calls a “modern Silk Road” trading route that Beijing believes will kick start “a new era of globalisation”.One more:
Plus, as I emphasized in this week's message, we're a global investment shop. Meaning, agree or disagree with the West's present approach to trade, there's clearly opportunity here for global-minded investors to exploit:
From the Bloomberg Brief: emphasis mine....
“China is offering an alternative to the U.S. version of globalization,” Cai said. “In the Chinese case, it’s globalization paved by concrete: railways, highways, pipelines, ports.”So then, the pushing, the stacking, the layering and the tamping of all of the material the Belt and Road Initiative calls for is going to require some serious heavy lifting equipment. The kind that a little U.S. company called Caterpillar (a top holding in our core industrials ETF) will be more than happy to deliver. In fact, it looks like the company has already engaged.
After a long drought, CAT's global equipment sales appear to be on the rise:
click charts to enlarge...
While 8% year-on-year global sales growth is nothing to sneeze at, take a look at where it's coming from.
An astounding 48% year-on-year increase in equipment sales coming from Asia!
I'll say it again, Western investors absolutely should not resist the potential global infrastructure buildout to come...