Mobius: A tour of China

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Fuzhou’s city government seems to be taking advantage of various preferential policies granted by the central government to foster increased cooperation with Taiwan, not only in terms of trade but also in financial activities and high-tech industries.

Probably the most interesting part of Fuzhou—and testament to the city’s long history—was an area called “The Three Lanes and Seven Alleys,” a well-preserved older section of the city covering four hectares with 268 ancient civilian residences.

The area originated in the Tang Dynasty and was called Luo City. The plan of the city was done in a symmetrical pattern with a stream running through it. We toured the delicate tiled houses with white walls, and in most of the houses there are pavilions, gardens, artificial mountains, flowers and small lawns.

The doors, windows, steps, door-cases, flower-pot pastorals and columns were all decorated with beautiful carvings showing the civilian art of Fuzhou in the ancient times. Today, the area is commonly called the “Museum of Ancient Architecture.”

The Three Lanes and Seven Alleys is also the birthplace of many famous politicians, military men, writers and poets. The liveliest main street was full of traditional shops engaged in all kinds of traditional crafts as well as selling local cakes and candies.

Leaving Fuzhou in the cavernous train station, I spotted video display ads for a popular energy drink as well as a particular cosmetic that would transform a woman’s face into what was considered to be a more attractive shape.

I also noticed a sight that is common around the world today—many people staring at their mobile phones playing games, sending messages and browsing the Internet. A small crowd gathered around a table at the station where mobile phones could be recharged.

Reflecting on our recent trip to some of the so-called second- and third-tier cities in China gave us the impression that the service sector (including tourist and culture-related industries) is strong and likely to continue growing.

Although we did notice that infrastructure and property investment had slowed down due to more stringent approval process and still-high property inventory, we believe that this could improve gradually in 2016 as financing to local governments has improved.

While we recognise many investors are concerned about China’s growth rate, from our perspective, one of China’s biggest potential challenges may be instilling investor confidence. We continue to see consumption as a good investment theme, and we emphasize that investors should consider looking beyond China’s short-term market gyrations to its long-term potential that seems clearly evident—at least from our perspective.

The comments, opinions and analyses presented herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy.

Because market and economic conditions are subject to rapid change, comments, opinions and analyses are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy


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