China Influencing Asian Region and Global Markets as Its Economy Transitions: Disposable Income Drives Increase in Sales in Mobile Phones and Luxury Cars

Wall Street Transcript

67 WALL STREET, New York - June 26, 2013 - The Wall Street Transcript has just published its Investing in Asia Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Investing in Asia - Longer-Term Investing - Asia Pacific Investment Theses - Investing in China - Equity Investing Strategies - China's Domestic Markets - Undervalued Asian Companies

Companies include: International Business Machine (IBM), Taiwan Semiconductor Manufacturing (TSM), Apple Inc. (AAPL) and many more.

In the following excerpt from the Investing in Asia Report, an expert portfolio manager discusses his portfolio-construction strategy and his investment philosophy:

TWST: Which Asian geographies and sectors are you most interested in right now and why?

Mr. Harriss: We're always interested in China. China has such a big influence on the region, as well as in global markets, particularly in the commodities area. The Chinese economy is in the process of transition. The growth drivers over the past 30 years have been heavy investment in infrastructure. It's a path that has been well trodden by countries that are going through the early stages of industrialization; attracts huge amounts of investments in infrastructure, where there it would be roads, ports, airports, waterways, railways and so on.

China is now in that stage where the returns on some of that infrastructure investment are now diminishing. And in fact, we're getting to an economy that is more mature, that is in the mid stages of industrialization. And really for the economy to carry on growing, we need to see a change to greater emphasis on consumer spending. And we've reached a point where GDP per capita on a purchasing power parity basis is around the sort of $8,000 mark. And that's quite an important stage to be reached where we can see consumption beginning really to take off and becoming more self sustaining, because you have enough numbers of people with levels of disposable income to fund discretionary spending.

So we look at things like mobile phones, TVs, luxury or discretionary consumer durables. We're seeing strong growth, for example, in notebook PCs, strong demand in hand-held smart devices, a greater use of Internet, Internet gaming. We're seeing growth in the luxury car segment and expansion of the dealership networks there, and over the next 10 years or so, we would expect to see that China's economic growth, which has been growing at 10% a year in real terms, will inevitably slow. And we're looking now at the 7% to 8% mark, but that is not something that particularly worries us...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Rates

View Comments (0)