Tuesday, March 16, 2010

MarK Mobius: China Growth is Sustainable

Mark Mobius on China Growth

Mark Mobius was talking at the Reuters Mining and Steel Summit on the future growth of China and whether he believed it was sustainable or not. The emerging market expert said while China will continue at high growth levels and it will be sustainable, it won't be able to continue at double-digit growth levels, but will probably continue on some time in higher single-digit growth.

This ensures raw material demand will continue to be high based on China alone, according to Mobius, and I would add it shows the long-term demand cycle we're in when taking into account all emerging nations, and to a lesser degree, developing nations as well, who will benefit from selling commodities.

Contrary to the idea China will be tightening up, Mobius looks at them continuing to to pursue raw materials no matter what they do with their currency. Taking into account Chinese concerns over economic conditions in the United States and the rest of the West, and you can see they know exports are going to take a long time to rebound, making their internal needs and domestic projects as important as ever. This doesn't mean there won't be decent exports, just that they'll take time to build up to pre-recession levels.

Some of the larger and safer emerging market investments Mobius mentioned as good plays were Compania de Minas Buenaventura SA (NYSE:BVN), Vale (NYSE:VALE) and PetroChina Company Limited (NYSE:PTR).

Mark Mobius on China Growth

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