By Keith Fitz-Gerald
Contributing Editor
As a tri-athlete who has competed at the international level, I know what it takes to get ready both physically and mentally for these always-challenging events. So when I tell you that the Beijing-bound Summer Olympians are asking themselves two questions – over and over, like a computer stuck in a logic loop – you can be sure that I know what I’m saying.
The two questions:
- “Will I be able to breathe when I get to Beijing?”
- “Is there clean water for hydration?”
It’s a mere 11 months until the Aug. 8 Olympic Games’ opening act curtain call, and apparently there’s neither. That’s bad for the athletes, bad for the Games and potentially terrible for China’s international reputation.
But when it comes to your money, that’s good. Actually, that’s great.
Let me explain …
Short on Time, Short of Breath
According to a number of recent news reports I’ve studied, the world’s elite athletes are so concerned about China’s pollution problems, they’re actually talking about staying out of the Olympic Village until the absolute last minute. Some coaches have enrolled their athlete-charges in special inoculation programs and – in the cases of Australia, Japan and the United States – may even take the unprecedented step of issuing detailed, formal health warnings to team members.
Are such extreme measures justified?
You bet, especially since it was recently reported that even some of China’s elite athletes are apparently getting sick – and they train in Beijing’s legendary glop every day – so you’d think they’d be accustomed, if not immune, to its effects.
China’s national broadcasting network, CCTV, isn’t helping matters much with a recently aired report that 40 of China’s best athletes got so sick during a January visit to the Chinese national sports authority that they had to withdraw from competition. Making matters worse still, CCTV also reported that chronic air and water pollution is now the leading killer in China and accounts for a staggering 23% of deaths. This makes pollution-induced cancers and other illnesses a very real concern for the highly trained athletes who will be gulping in China’s wonderful air as they push themselves to the very edge in pursuit on their once-in-a-lifetime shot at athletic immortality.
As downright nasty as that sounds (I suddenly realized I’d been holding my breath as I wrote that sentence), this is actually terrific news for your investments – at least, it is if you’re properly lined up to capitalize on China’s cleanup efforts.
Here’s why.
The Need to Make a Big Splash
The one thing China fears more than anything else is falling on its face – in the Asian culture, it’s referred to as “losing face” – on the international stage it’s worked so hard to ascend. But with the intense media scrutiny it’s assured of facing during the Olympic games, it’s certainly something China should be worried about.
Obviously, having elite athletes and spectators collapsing from pollution-related stress – under the harsh and unforgiving spotlight of the global TV media – is a scenario to be avoided at all possible costs. Beijing will go to super-human lengths to prevent this from happening. And it will dramatically accelerate its spending on key clean-up initiatives and other antipollution programs; indeed, I’ll be surprised if they don’t actually goose the budget up and over the $1 trillion they’ve already allotted to this global coming-out party.
Longtime China watchers will note a wrinkle here. You see, cleaning up the pollution isn’t really the goal here. In fact, it never has been. What’s really at play here is the perception of “greatness” in Beijing’s eyes that China will want to live up to for years to come. It’s a uniquely communist phenomenon that accompanies central planning committees.
Put another way, by having the Olympics go off without a hitch, China’s government can perpetuate a myth of “greatness” that it believes will drive the Chinese people – and the country’s economy – faster, farther and more profitably than ever before. It’s a bit like injecting nitrous oxide (back in my racing days, we called it “nitrous;” but the young “tuner” crowd of today refers to it as “Noss,” an acronym for Nitrous Oxide Systems…believe me, however, the tremendous kick in horsepower is the same no matter what you call it…) into an already-souped up motor: The horsepower will increase exponentially, and the already racy automobile will literally shriek in approval as it screams along the highway. In the case of China, the nitrous oxide will be the pride from a job well done that the central government will continually pump into the work force motor – hoping for the same kind of performance results as that race car.
The ‘Smart Money’ is the ‘Clean Money’
While this will clearly benefit the Chinese in many ways, it will benefit farsighted investors even more because much of the so-called “clean money” will flow directly to the bottom line in all sorts of “green-related” industries that China is planning to showcase at the games.
Particularly appealing choices include companies in the water filtration, separation and prevention industries, because those are related to commodities every Chinese citizen needs every day. Others include solar power, coal liquefaction and even alternative-fuel producers.
Of course, as one of my friends facetiously points out, if you really want to strike it rich, somehow get a piece of the bottled-water concession at the Olympic Games. I agree with his thinking, but feel his investment thesis needed more research: You see, my sources tell me that over half the bottled water being sold in Beijing right now is “fake.” I haven’t figured out a way to play that. Yet.
Perhaps I’ll ask my asthmatic friends in Beijing….
Related Articles and Links:
- Voice of America:
Fewer Cars Clog Beijing Streets in Pre-Olympic Test.
- Natural Resources Defense CouncilReport:
Bottled Water: Pure Drink, or Pure Hype.
- The World Bank Report:
The Cost of Pollution in China: Economic Impact of Physical Damage (July 11, 2007).
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.