This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China Watch: No Speed Bumps in Infrastructure Race

Infrastructure in China stands at an unusually high 9% of the GDP. As it's pretty hard to hide behind the in-your-face mega-projects, Chinese officials have reformulated their formula: "At a time when external demand shows no signs of improving and domestic consuming habits need time to adjust, well-planned infrastructure investment seems essential, if not the only option for China to boost its sagging economy," the official Xinhua News Agency said last month.

No wonder China got its most-ambitious-ever high-speed railway plan rolling over the past five years and last month announced that it would build 70 new airports plus expand another 100 by 2015. China will speed spending on roads, utilities and more railways to boost growth, the official China Securities Journal adds.

Get ready for an infrastructure boom by year's end, warns Barclays Capital Asia regional economist Wai Ho Leong.

"There is a growing acceptance that after the leadership transition in September, the new administration would unveil more ambitious spending plans," he says. "Corporate planners are now preparing for the resurgence."

So new infrastructure will keep trucking along. But in case something like the debts owed by state-owned developers or unforeseen macroeconomic snags force China to hit the brakes at home, consider Beijing's boom frontier in Africa.

A "concentration of projects" are going up in Angola, Nigeria and Sudan, to name three of 35 African countries invested by China, says the Japan External Trade Organization, a market research agency backed by the government Tokyo. Japan has historically led Asia in largess for the developing world, hence its interest. China sights Africa mainly for power generation and transport.

But despite the speed and scope of new Chinese infrastructure, it's not easy to build a portfolio of related stocks.

China State Construction Engineering share prices have slipped 17% over the past year, modest given market trends worldwide, but it's listed in Shanghai, where foreign investors often feel uncomfortable because of transparency problems.

However, shares of China Railway Construction are traded in less opaque Hong Kong, likewise transport infrastructure builder China Communications Construction Co. (1800.HK). Share prices of both are tacking neither up nor down.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs