INTRODUCTION:
THE NEW FACE OF
WORLD ECONOMICS
OB MIGRATION. Shortages of skilled workers. Competition
Jwithin industries. All these symptoms of growth tell us some-
thing. Growth comes in a variety of shapes and sizes, but when we
see it occurring along with emergence of technological and skilled
levels of manufacturing, it is significant.
Historically dominated by an agricultural population, China
today is undergoing a vast migration, not only in the sense of where
people live, but also the types of jobs they hold and seek, their
wages, and the entire economic viewpoint among working people
and industry. Many nonagricultural manufacturing sectors in
China are growing in double digits each year as the country’s indus-
trial economy explodes.
In this environment, the country struggles with the problems
typical of an emerging economic base: the need for improved train-
ing programs, unemployment, energy demand, and housing. But
the problem is not what to do with a labor force; the problem is
competition among industrialized cities within China to attract
young workers. In 2005, a major manufacturing center in South
China, Shenzhen, found only 53,000 applicants for 105,000 skilled
technician openings. The city estimates demand for more than two
million skilled workers over a five-year period beginning in 2005.
Shanghai, another center with a growing demand for skilled work-
1
ers, anticipates similar problems filling jobs in the future.This explosion in skilled jobs has positive ramifications for in-
vestors, both in China and elsewhere in the world. The lack of
skilled labor is certainly an impediment to growth, but as growth
pangs go, it is a more desirable problem than the alternative, a lack
of available jobs for existing skilled workers. As the country works
to adjust to the ever-growing demand levels in skilled vocations,
advance company training programs and investment, and manage a
population shifting toward industrialized areas, investors from the
United States and other trading partners of China may realize the
investment potential within Chinese industry, on many fronts.
For investors outside China, the problem is in determining
how to invest capital in a range of promising industries, not only
technology and manufacturing, but many others as well. China’s
growth is rapid and occurring across many investment sectors. In-
vestors who understand this growth curve may want to be involved,
but do not know how to go about moving capital from traditional
western markets to the massive and ever-expanding Asian economy.
This book presents an overview of the current situation, the
background, and the potential for investment in China and in its
potentially lucrative industries. Equally important, the book pro-
vides suggestions for exactly how capital can be invested without
having to move funds overseas. In many countries, including the
United States, the complexity of opening accounts in foreign coun-
tries, working with stock exchange rules dissimilar to their domes-
tic exchanges, and managing risks is simply too extensive. As a
consequence, many investors who desire multinational asset alloca-
tion or who recognize the potential in China’s market have simply
decided that, without more knowledge, it is not prudent to attempt
to move funds into that market.
This book shows you how you can invest directly in China’s
emerging growth boom—without the complexity and risk associ-
ated with investing overseas. Using domestic outlets, you can be-
come an international investor. This book explains not only how to
move money into the Asian market safely and easily; it also pro-vides you with vast resources for analysis and identification of prof-
itable companies and industries.
As the opportunities continue to present themselves for invest-
ment in a dynamic and growing economy, you will find many ways
to put capital to good use. The growth pains identified by the
symptoms of skilled-labor shortages and competition among in-
dustrial areas are problems, of course; however, they also serve as
symptoms of strongly positive change. These problems are typical
in growing and productive economies.
We present information to you in two sections of this book.
Part I, A Premise for a New World View, demonstrates how
China is emerging as the leading economic power in the twenty-
first century. As the world becomes truly global in economic
terms, a variety of shifts must be expected to occur. Agricultural,
manufacturing, high-tech, medical, and research industries—
among others, of course—are already shifting away from tradition-
ally dominant economies in North America and Europe toward
China, India, and other Asian growth centers. Part I shows how
and why this is occurring. The shift in economic and monetary in-
fluence is both rapid and profound; the implications of these
changes are as significant as the Industrial Revolution was in Eu-
rope of the past; and new developments will change the way that
workers function within the economy of each region or country.
For example, in the future, the primary competition may not be
between the United States and Asia as a whole, but between China
and India withinthe larger Asian market. The potential for changes
such as this affects every investor in every country. Along with
changes in centers of economic influence come changes in invest-
ment opportunities.
In Part II, Methods and Strategies in the New Market, you will
discover exactly how China is growing and which industries are the
strongest. Like all economic centers, the Chinese economy is par-
tially self-reliant and partially dependent on outside resources. The
growing population and manufacturing base of China will make itthe future’s leading energy-buying nation. In the past, the United
States held this role; but changes in economic as well as in demo-
graphic realities will also change the relative demand base for nat-
ural resources.
China faces many challenges in its promising future. Although
you as an investor can observe a lot from the economic situation in
that country, you also need to be able to assess the situation from a
new perspective. In the western world, growth has usually been as-
sociated with labor shortages. In China today, there is no shortage of
unskilled labor, but there is fierce competition for skilled workers
in the fastest-growing sectors, primarily technology. The challenge
of gearing up to better train people to fill skilled jobs is huge, and it
is difficult to imagine in terms of time, investment, and social
changes. At the same time, China also needs to balance its indus-
trial needs with the equally important needs of its agrarian base.
There are, in fact, two Chinas in this respect. The heavily industri-
alized China and the agricultural segment are separated in many
respects. Income levels and requirements, employment, poverty, ge-
ography, and cultural priorities are among these; also of great im-
portance is the challenge to China of how it balances the priorities
of industrialized and agricultural population groups.
Investors who are aware of these cultural and social forces will be
well equipped to determine exactly how their investment resources
can be put to work. Although foreign investors will normally funnel
their capital through domestic outlets—and appropriately so—it is
not enough to simply trust an adviser. In the United States, for ex-
ample, history has shown that advice is not always sound, nor is it
given in the best interests of the investor. Most experienced investors
have discovered, often at great expense, that they need to be very se-
lective and critical of the advice they receive and act upon. This has
not changed.
In this book, you are provided with resources you can use to
perform your own research or to locate and maximize information
provided by objective research outlets. However, decisions invari-ably are better made with high-quality research. This book is not
intended to make research easier; it is designed to help you focus
your research efforts intelligently, so that you will be able to avoid
the common problems investors face in any specialized plan. This
includes investing in specialized or risky products, unfamiliar in-
dustries, or foreign countries. The resources you find in this book
will help you to identify the risk elements you need to be aware of,
and to make informed decisions based on objective research. As
with any investment plan, this is a sensible formula for reducing
risk and finding out how to protect capital.
As a potential investor in Chinese growth, you face the usual
challenges every investor faces: identifying opportunities, matching
appropriate risks, and proceeding through the appropriate venue.
You also face the additional challenges of a dissimilar culture and
social order. This book helps you to understand these aspects of
your investment decisions, and to improve your knowledge of this
new and promising market.

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