Last week I told you about China’s Beijing 2008 Olympics, which will be the biggest, most expensive Olympics yet. The $40 billion spectacle will be used to show off China to the world for the first time ever.
This week I’m going to tell you about the second massive project that Beijing will spend billions on over the next several years. I’m talking about the World Expo 2010 in Shanghai.
The event, which is becoming known as the “Economic Olympics,” will be staged from May 1 to October 3, 2010. It will include some 20,000 cultural activities and forums. More than 70 million visitors are expected to attend, and that’s just the beginning …
The World Expo Will
Be a Huge Affair
The scope and impact of the World Expo is hard to comprehend. Here are just a few of the highlights:
200 countries and organizations will participate. 18,000 households and 272 companies in the area will be relocated to give way to the project. All told, $3 billion will be spent on renovation and relocation work, including a $75 million, 900,000-square-foot underground site.
The Expo will take place on 1,334 acres adjacent to the Huangpu River. Six new bridges and as many tunnels will be built across the river, connecting one side of Shanghai to the other.
The first batch of construction includes 11 roads that will connect the Expo with the rest of the city, while another 30 roads will be built or expanded for the fair. About $5 billion will be spent on 56 miles of new highways and 440 miles of roads.
Shanghai’s subway system will be expanded from three lines totaling 40 miles to 15 lines totaling 248 miles. Daily passenger capacity will be increased from 800,000 to five million!
A second train station is currently being built in Shanghai, while $2.4 billion will be pumped into eight more railways to link Shanghai with China’s eastern and northern provinces.
Shanghai’s airport, already one of the biggest in the world, still isn’t big enough to handle an estimated 50 million passengers in 2010. As a result, two new runways, a second terminal building, and a state-of-the-art maglev train are in the works.
Nearly $5 billion will be spent on 260 different projects for environmental protection, to reduce pollution and upgrade environmental management standards.
Shanghai is the fourth-largest tourist destination in the world, and there’s already a shortage of hotel rooms in the city. That’s why nearly 14,000 new hotel rooms are expected to be built over the next four years, including 3,000 four- or five-star rooms.
And as if all that isn’t enough, Shanghai is planning to build a ship called “The World Expo.” The boat will travel the oceans of the world, stopping in ports to display Chinese cultural artifacts to promote the World Expo 2010.
China’s Continued Economic
Growth Is Virtually Guaranteed
I’ve pointed it out to you many times before, but it bears repeating: China’s economy is soaring. And in my view, this is by far the most important macro-economic force on the planet today.
Remember, 1.3 billion souls are driving China forward — that’s fully 20% of the world’s population and four times the number of people in the U.S.
So, if you’re not watching the trends in China … if you underestimate the country’s impact on the world … you will likely miss many of the biggest profit opportunities in your lifetime.
I expect the Beijing 2008 Olympics and the 2010 Shanghai World Expo to help China’s economy continue its double-digit growth for at least the next four years. After all, $81 billion will be spent on just those two projects!
By the time that money trickles through the Chinese economy, I estimate that nearly $650 billion in additional gross domestic product will be created. That would increase the size of China’s economy by nearly 30% in the span of four years.
The profit opportunities will be boundless. Just consider the wide-range of companies that can capitalize on these two mammoth events:
- Industrial names like General Electric, United Technologies, Siemens, Lenovo, and LG.
- Huge natural resource companies like BHP Billiton, steel maker Posco, and oil and gas companies such as Sinopec and CNOOC.
- Food companies, tourism companies, cruise lines … even water companies like Evian and Perrier. Consumption of water in Shanghai is expected to reach 800,000 bottles a day by 2010!
Here are three of the specific companies I’m looking at right now …
- Hutchison Whampoa: The company operates everything from ports to a telecommunications business, and just acquired a 69% stake in Beijing Tourism Group.
- Shanghai Jinjang International Hotels Development: This provider of hotel and catering services could certainly benefit from the massive spike in visitors to China.
- China CYTS Tour Holdings: China’s leading international travel agency saw its revenues rise 29% in the first half of 2006 vs. the same period last year.
These are just a few of the opportunities I see, and I think the time to prepare for them is now. Reason: I see some of these stocks doubling or tripling over the next few years.
I’ll be giving specific recommendations to my Real Wealth Report subscribers soon. In the meantime, hold all recommended positions in gold, oil, alternative energy, water, and food.
Best wishes,
Larry
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