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英文财经 |
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The Biggest Investment Boom in History |
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星期三, 六月 11, 2008 15:28:15 |
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by
Nicholas A. Vardy |
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While Wall Street focuses obsessively on today's economic headlines, 99% of market participants are ignoring the big picture changes that are going on in the global economy -- and what just might be the biggest investment boom in history. While Western banks have written off close to $300 billion in subprime loans, emerging economies will spend four times that amount -- an estimated $1.2 trillion -- on roads, railways, electricity, telecommunications and other infrastructure projects just this year. That's the equivalent to 6% of their combined GDPs -- and twice the percentage being invested in developed economies. Even at the height of the United States' infrastructure spending -- the expansion of railways in the mid-nineteenth century -- total investment barely hit 5% of GDP. Today, the equivalent number in China is 12%. 'Laggard' India intends to almost double the infrastructure investment share of its GDP from 5% to 9% within the next five years.
Morgan Stanley predicts that emerging economies will spend $22 trillion on infrastructure between now and 2018. Australia's Macquarie Bank puts the number at $30 trillion through 2030. Last year, Brazil announced a four-year plan to spend $300 billion to modernize its infrastructure. The Indian government has penciled in $500 billion in infrastructure projects in its latest five-year plan. Russia now has plans to construct 39,000 miles of new roads and 5,300 miles of railways by 2015, including an eight-lane expressway that will link St. Petersburg to Helsinki and Moscow by 2015. And this investment boom isn't limited to emerging economies. A casual drive through the Northeast corridor of the United States will confirm that much of the United States' roads, airports, bridges and tunnels are in sore need of upgrading. The American Society of Civil Engineers estimated that $1.6 trillion would be required during a five-year period to bring U.S. infrastructure back into shape.
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The Biggest Investment Boom in History: The China Factor
Unsurprisingly, the biggest player in the infrastructure boom is China. Four out of 10 dollars spent on infrastructure during the next 10 years will be spent by Asia's emerging economic giant. China's commitment to infrastructure has been relentless. Between 2001 and the end of 2005, it spent more on roads and railways than it did in the previous 50 years combined. By the end of 2007, China had built some 33,500 miles of roads, thereby achieving in 17 years what the West took 40 years to accomplish. And its remarkable pace is continuing. Between 2006 and 2010, China will invest $200 billion in railways alone, four times more than in the previous five years.
Like the Olympics, China's infrastructure boom is a collection of trophy projects. Beijing's new airport terminal is the world's largest. The floor space is 17% bigger than London's Heathrow -- the world's busiest airport. Designed in the form of a Chinese dragon, it was planned and built in a mere four years by an army of 50,000 workers. And China plans to add another 97 airports by 2020 to the 142 it had at the end of 2006. The number of airports handling more than 30 million passengers a year will grow from three to 13. Bullet trains are another high profile endeavor. Costing $30 billion, the Beijing-Shanghai high-speed line is the most expensive project in China's railway history. An 800-mile bullet train between Beijing and Shanghai -- the equivalent of going from New York to Chicago -- will reduce the travel time between the two cities to a mere five hours. But the ultimate trophy is yet to come. A plan published by the Ministry of Communications in 2004 mentions a highway from Beijing to Taipei, Taiwan, to be completed by 2030. The technical challenges of crossing the 94-mile Taiwan Strait aside, the document does not suggest how to tackle the even bigger political problem of reaching an agreement with renegade nation Taiwan. But no one can say the world wasn't warned.
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The Biggest Investment Boom in History: A No-Brainer
Here's what I particularly like about the infrastructure investment boom. Infrastructure spending provides the ultimate bang for the investment buck. Initially, a wide range of infrastructure companies -- steel, mining equipment, and construction companies -- are set to benefit from an unprecedented construction boom. But infrastructure is a gift that keeps on giving, itself boosting economic gains. The World Bank estimates that a 1% increase in a country's infrastructure stock generates a 1% increase in the level of GDP. Once you understand that, it's easy to see how East Asia's investment in infrastructure explains a large part of its faster growth compared to Latin America.
And like the best global megatrends, the infrastructure boom is not about re-inventing the wheel. The late Nils Taube, one of the United Kingdom's most esteemed fund managers, noted at the London Junto last year that the secret to his investment success was to "use your eyes and plagiarize." Unlike venture capitalists in Silicon Valley, investors in global infrastructure don't have to uncover the next Google to make money. Infrastructure assets offer investors remarkable benefits: there is little competition; they offer essential, non-substitutable services; and they provide stable cash flows linked to inflation during a period of several decades. After all, people use and pay for roads, bridges and ports everyday.
Big Western banks slowly are getting into the infrastructure investment game. Morgan Stanley and a firm set up by General Electric and Credit Suisse have raised close to $10 billion for their respective infrastructure funds. Buyout shop KKR recently unveiled plans to diversify into infrastructure, and is planning to raise as much as $15 billion for its first infrastructure fund. Private investors already own London City Airport, as well as Argentina's second largest port and a liquid petroleum product storage facility in India. The Morgan Stanley fund has bought stakes in Venice Airport, Italy's third-largest, Chicago parking garages and the Port of Montreal. The biggest banks in the world are catching on to the biggest investment boom in history. You should, too.
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文章来源：MoneyShowAsia.cn |
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