So let’s get started by taking a look at the first of these five catalysts…
Generational Bull Market Catalyst No. 1: The New Superpowers Emerge
China has become such an integral part of our economy that many Americans forget that it is still a relatively new relationship.
Back in 1980, there was little trade between the United States and China, which President Richard Nixon only opened to the West in 1972. The communist nation began adopting market reforms seven years later.
Those two events set in motion a huge boom in China’s economy. According to the World Bank, in 1980 China’s adjusted-for-inflation gross domestic product (GDP) measured a mere $202 billion, or roughly today’s market cap for Verizon Communications Inc. (NYSE: VZ).
By 2002, China’s GDP grew to $1.2 trillion. By 2012, that figure had climbed to $8.2 trillion.
And by the end of 2016, China’s economy likely will be worth a whopping $14.93 trillion.
In comparison, the U.S. economy will grow from about $6.49 trillion to $18.36 trillion over that same period.
And I think China will overtake the United States in 2018.
With an annual growth rate in excess of 7%, China’s economy could easily double again in the next 10 years. So, with a population of 1.3 billion people with increasing wealth per capita, China can’t possibly produce everything it needs domestically.
And that’s why you see big American technology companies like Apple Inc. (Nasdaq: AAPL) making aggressive forays in China. Apple recently announced a deal with China Mobile Ltd.(NYSE ADR: CHL) to bring low-cost iPhones to China. And that’s one of the reasons Apple’s stock is up 15% so far this year.
And Apple is only one tech player jumping into China and other exploding markets, including India and Brazil.
Additionally, a company that could have the largest U.S. initial public offering in history is based in China. E-commerce leader Alibaba is expected to go public as early as August, and analysts say the value could be in excess of $20 billion.