by Peter Lees
1. April 2011 01:10
Much has been made of China’s desire to put the brakes on its economic growth. But it’s important to look behind the headlines, with one of my regular contacts on the region still very bullish on the outlook.
Earlier this year the Chinese government announced the construction of 10 million social houses and recently announced that a further 10 million affordable homes are to be constructed. But this could still only be the tip of the iceberg as 85 million people have been given permission by the state to move and another 65 million are allegedly on the waiting list.
He also added that one of the issues facing construction of these houses is a lack of infrastructure so its no surprise that China’s largest concrete producer has its largest ever order book. On top of this has been the recent announcement of a pause in the China’s nuclear power programme, in light of the events in Japan.
What this means for an investment perspective is further strong demand for the miners in terms of both infrastructure construction and coal for power generation. As such I’ve been adding further to both Xstrata and Rio Tinto in the F&C UK Equity Fund.
