If all you've been hearing regarding China recently is noise about its economic slowdown, you need to find a better news source.
Investors need to stop worrying over China's long-expected gradual slowdown. Do so and you likely will see, as my guest today does, the long-term growth ahead for key tech sectors in the world's most populous nation.
I'm talking about the kind of growth that will fill investors' portfolios with soaring profits for years to come.
Back from China
That's one takeaway I gleaned from an in-depth conversation I just wrapped up with one of the tech investing world's leading China experts. And he has plenty more evidence to debunk the "Chinese slowdown" story.
In other words, Kevin Carter is helping us "Separate the signals from the noise" – Rule No. 2 of Strategic Tech Investor's "Your Tech Wealth Blueprint."
[Click here to receive the report and a free subscription to Strategic Tech Investor]
He just returned from a trip to China, so now is the perfect time to hear what else he has to say…
My guest today, Kevin Carter, runs the Emerging Markets Internet & Ecommerce ETF (NYSE: EMQQ). On his most recent overseas trip, he spent his time checking up on the health of China's tech industry and economy.
Carter's fund concentrates on Chinese tech leaders like STI's "Million Dollar Tech Portfolio" holding Alibaba Group Holding Ltd. (NYSE: BABA) and Baidu Inc. (Nasdaq: BIDU), the so-called "Google of China."
Today, I want to share his thoughts on the profit potential that lies ahead for Chinese tech firms. The following is an edited transcript of our wide-ranging conversation.
Michael Robinson: Having just returned from China, can you give us your ground-level assessment of economic conditions there?
Kevin Carter: I'm just back from 10 days in four cities in China – Shanghai, Nanjing, Yangshuo, and Beijing – and I'd have to say, quite strongly, I saw no signs of China "slowing down." Domestic leisure travel, or tourism, is a prime example of consumption and China's move toward a service economy.
One of the main things I observed was that all of the places I visited were more crowded than I had ever seen them. And, importantly, the crowds seem to be coming increasingly from second- and third-tier cities. Their increasing presence is an indicator that domestic tourism continues to grow rapidly.
Another observation is the spread of the smartphone. As I awaited my delayed flight from Yangshuo to Beijing, I noticed that nearly everyone waiting with me was on a smartphone. From my count, at least 70% of the people were on their smartphones.
I also experienced firsthand how app-based business models, like Airbnb and Lyft, are spreading in China just as they are here in the United States.
I was the first person waiting for a taxi in the cue at the Grand Hyatt Beijing one night. Three times a cab turned into the circle only to be quickly taken by people that held up their phones and said "Didi Dache." When I expressed my dismay that they were "taking my cab," I was informed that Didi Dache is "the Uber of China."
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.