This ETF gives access to the Chinese materials and commodities sector that would benefit from increased home building and the purchase of consumer appliances and furniture associated with it.
The bullish argument has it that the Chinese will find materials cheaper, even if only marginally, and will hence buy more of them: no more substituting plastic tubes for copper ones.
And Chinese demand for raw materials, that's driving commodity market at the moment.
This bureaucracy is charged with the job of securing supplies of raw materials so Chinese industry can keep humming--and paying otherwise restless workers.
What should be the future strategy for multinational firms trying to take in this Chinese wave of raw materials imports and low-cost manufacturing and sourcing in Africa?
This could be a trend, but it could also be part of a seasonal production cycle where Chinese companies import raw materials and components in the spring, in order to gear up to export finished products later in the year.
Mining giants like Rio Tinto, Freeport-McMoran and Glecore figured the roaring Chinese demand for raw materials would bail them out of any mega- takeover that meant borrowing a bundle of debt to diversify into aluminum or gold or copper was the path to growth, higher profits and ecstatic shareholders.
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And, simultaneously, by artificially increasing domestic supply, the same export restrictions advantage Chinese manufacturing consumers of those materials.
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And now some Chinese manufacturers are benefiting from those materials they purchased at lower prices.
Chinese and Indian demand for raw materials has driven world prices for commodities (of which South American countries are big producers) to unprecedented levels.
Many Japanese SMEs have the technology and knowledge base, yet are capital-poor with exorbitantly high labor and materials operations costs relative to Chinese firms.
In their relentless search for raw materials to fuel the rapidly growing Chinese economy, Chinese companies are snapping up natural resource companies in Australia, Canada, Africa and wherever else in the world they can be found.
Chinese banks were offering loans to producers of raw materials at a time when it was hard for them to attract financing from elsewhere.
In overnight trading the U.S., Chinese solar energy stocks swooned on reports that solar materials maker LDK planned layoffs as it faces high debt (see story here).
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Chinese firms are going global for the usual reasons: to acquire raw materials, get technical know-how and gain access to foreign markets.
Chinese foreign direct investment has long been characterized as focusing on securing raw materials in emerging markets like Africa and Latin America.
Materials shares weighed on benchmarks after the morning's disappointing news on Chinese industrial production and as the dollar continued to gain against other currencies.
The Asian aesthetic is also referenced through proportions and scale, the naturalness of materials, meticulous attention to detail, decorative fabrics, silks, artwork and a Chinese granite hearth quarried from the Yangtze River.
It is also home to many Chinese and foreign-invested companies in industries as diverse as electronics, defense, pharmaceutical and advanced materials.
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