In life or in investing, it’s easy to be frightened by something we don’t understand.
And a lot of people don’t understand China.
Most people think of China as a nation drowning in low-cost manufacturing industries, sweatshops and copycats.
That may have been true 40 years ago, but China is much different today.
China is now the world’s second-largest economy (soon to be the largest) and it has the second-largest stock market.
Its economy is no longer dependent on manufacturing. Instead, China generates 50 percent of GDP from the services sector.
Its home to the world’s most advanced manufacturers of personal drones, robots and speech recognition software.
And the country will soon have the world’s largest middle class with over 550 million people by 2022.
So here are four more things you might not know about China that I learned on my recent trip there…
Find the Top 3 EXTREME Dividend Stocks?
Palm Beach Millionaire Reveals How you could Collect 100% on Your Savings Every Year… For Life. His secret here.
1. China is getting more efficient through technology
The use of artificial intelligence is spreading throughout China. Visitors notice this as soon as they land at Beijing Capital International Airport, the world’s second-busiest airport.
Foreign travelers are required to scan their passports, fingerprints and face on machines before reaching immigration.
As soon as you reach immigration, your data is recognised by the system, hastening the time it takes to clear through.
The next time you fly into China, all you’ll need to do is scan your passport on the machine and the airport’s system will already recognise you.
A Didi car (China’s equivalent of ride-hailing service Uber) awaits you at any pickup point of your convenience, bringing you to your destination at a fraction of the cost of a New York or Hong Kong cab ride.
2. The language barrier is closing
One of the biggest concerns I hear from people wanting to visit China is the language barrier. Over 70 percent of Chinese speak Mandarin, which is one of the most difficult languages to learn. (I should know. I spent my childhood years learning it!)
But in just the past six months, I’ve noticed a sizeable and growing percentage of locals growing more comfortable with speaking English.
At the Starbucks Reserve outlet outside the hotel in Beijing, the Fat Burger restaurant near the Forbidden Palace and the ticketing office at the Chaoyang Theatre, people were speaking English.
At the train stations, English words and an English-speaking automated voice recording plays right alongside Chinese characters, minimising the chances of getting lost.
Tour guides and hotel concierges are also comfortable speaking English.
This is a clear sign that China’s people are adapting to a shifting economy – from one that is manufacturing-oriented to one that is dependent on providing service to consumers.
And early investors who take action now have the chance to reap huge profits, as this brand-new industry is expected to surge as high as 142,672%. Click here for details.
3. Internet is not as restricted as you think
There’s a lot of talk about how Beijing limits access to the internet. This includes banning foreign internet companies like Google and Amazon from operating in China.
Beijing also supposedly monitors every word you send over the internet.
While that may be true in some respects, Beijing doesn’t make it too difficult for anyone to access the World Wide Web through a Virtual Private Network (VPN).
A VPN masks a user’s internet protocol (IP) address so that it appears that he is accessing the internet from another location – in this case outside of China.
You can even buy pre-paid SIM cards with built-in VPNs, which eliminates the need for you to use a VPN application on your smartphone.
So while Beijing tries to make it difficult to access the internet freely, it doesn’t make it impossible to do so.
4. Chinese stocks are getting a boost
China is playing a much bigger role in the global economy.
That’s why MSCI, the world’s leader in the creation and management of equity-based indexes, decided to quadruple its weighting of China-listed stocks in its global indexes.
An estimated US$10 trillion of assets are benchmarked to the various MSCI indexes.
The hike in China’s weighting in the MSCI indexes is expected to result in as much as US$125 billion of funds flowing into the 448 selected Chinese-listed stocks.
This weighting change is going to happen over three phases (May 28, August and November). It will act as a steady, rising tide that lifts the Chinese stock market.
You see, fund managers and institutional investors that track MSCI’s indexes will have little choice but to purchase Chinese stocks to accurately represent the performance of the index they follow.
One way to profit is with the iShares MSCI China ETF (Exchange: New York; ticker: MCHI). It seeks to track the investment results of an index composed of Chinese equities that are available to international investors.
Editor, Stansberry Pacific Research