Belt and Road initiative

What kind of stocks benefit?

CAT and DE?

Not strictly Belt and Road, but it looks like Africa is shaping up to be the next China. The upcoming Factory of the World.

Highly doubtful. India would’ve been more believable but even that requires a real stretch of imagination.

Nobody believed China could develop that fast either. India is still held back by its politics. I am more hopeful on Africa than India.

I am halfway thru this wonderful book about Chinese entrepreneurs setting up factories in Africa. They are taking their manufacturing know how and marrying it with low labor cost in Africa.

The Next Factory of the World: How Chinese Investment Is Reshaping Africa

Why Africa? What about those nations along the belt in between China and Turkey? They are centrally located, is an ideal transportation and distribution hub.

Are they as poor and desperate as Africans? When people are poor they work hard and don’t ask too many questions. Like China when it opened up in 1979. At that time China was poorer than Ethiopia.

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You can read this twitter thread on the book. Highly recommend the book.

Poor and desperate don’t necessarily translate into success. Also, with increasing AI and automation, the next generation of workers will be robots, not human.

For factory, need mines and cheap energy. Cheap labor is not as critical. Africa has those comparative advantage over Central Asia?

Africa has a lot of natural resources. It’s just corrupt governments prevent the wealth from being shared with the citizens.

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By passing all the countries in between along the route? It is amazing how all the Muslim countries in the Middle East from Pakistan to Algeria produce nothing(except Turkey) but oil, drugs and chaos. Why can’t China kick start their economies?

Too biased. There are wealth pockets like UAE and Israel.

It is not about money. Only Israel, which has no oil, actually produces and innovates. I think being rich in natural resources can be a curse. Even Russia with a highly educated work force has to import most consumer goods. Oil wealth is a curse. Look at Venezuela. And most African countries

Resource curse is a thing. Nigeria’s economy got whacked because of oil.

Not really. Look at Norway. It’s not about having natural resources or not.

It’s a curse. Doesn’t mean it will always kill the victim. But if the country has a small economy and weak institutions to begin with, the prospect is not good.

Give me a break.

The problem with oil is the wealth is never evenly distributed. It gets concentrated by an oligarchy and creates an unstable society. Unlike Norway that was already a wealthy country before the discovery of oil when they had fishing farming and forestry wealth.

BTW why do people always refer to Norway to make a point?.. It is an outlier. Modern day descendants of Vikings. People that conquered the sea lanes 1500 years ago. And discovered America in 1000 AD. Only 5.3m homogeneous hard working individualists who have always been rich and self sufficient way before they discovered oil and socialism. BTW a lot of them moved to Minnesota over 100 years ago.
Trump wants more to emigrate


What about Dubai? Another outlier?

A nation can certainly depend strictly on oil and do well. Having good natural resources is never a curse. It’s a curse only because of other factors.

Dubai is a city in the UAE . Already mentioned. Little rich countries like these are by definition outliers.