Bhim Asdhir, President, Founder and CEO of Excel Funds recently returned from China for an on-the-ground report of the region. During his visit, he was captivated by the transformation China has undertaken in the last decade. China’s emergence as an economic superpower is visible not just by impressive data but also by the glamour that has overtaken many cities around the country. He tells us about his amazement over China when he got back. “I recently went to China and I was amazed by the progress that has taken place in China. It is now full of 8 lane highways, luxury cars, well dressed people, big screens TVs – it is clear to see China has really emerged. Shanghai looks as good as New York”.
As China’s economy has exploded over the last three decades, so too have the incomes and living standards of average Chinese person. Mr. Asdhir points out, “China now has a large middle class. The middle class will continue to grow, they already have the largest amount of cell phones, soon they will have the largest number of cars, TVs, houses etc in the world because of their massive population, therein lies the opportunity in China” . He also says, “Multinationals and high net worth individuals are investing in China to take advantage of the consumption that is driven by this huge middle class in China.” Excel China Fund takes advantage of this opportunity by investing in corporations that will benefit from the booming middle class.
Chinese company earnings are growing immensely as the economy continues to expand. “The forward P/E ratio for shanghai and Hong Kong is aproximately 10 times and the corresponding number for S&P500 is about 13 times, which makes the Chinese valuations very attractive. “ said Mr. Asdhir concurring from what he experienced in China. “The GDP per capita for China is just under $6,000 USD. The GDP per capita in the United States is around $50,000 USD but China is quickly moving up the value chain.” China is still in the early stages of an economic boom and Chinese investments still have a long way to go. Hence the foreign institutional investment in China is still increasing and there is still a lot to profit to be made from investing in China. The pictures in this article are courtesy of Mr. Bhim Asdhir and there will be more about his trip to come.