golden rooster

Tomorrow marks the Lunar New Year, the most important date in the Chinese calendar. It’s also the start of the longest holiday at two weeks, during which the largest mass migration of humans occurs every year as families reunite and go on vacations, both domestic and overseas.

2017 is the year of the 10th Chinese zodiac, the fire rooster, one of whose lucky colors is gold. Year-to-date, gold—the metal, not the color—is up 3.3 percent, which is below the 5.7 percent it had gained so far around this time last year. Unfortunately, gold prices won’t find support from Chinese traders next week, as markets will be closed in observance of the new year. If you remember, the yellow metal had one of its worst one-day slumps of 2016 back in October during China’s Golden Week, when markets were similarly closed.

But there are other opportunities to get excited about. More than 3 billion trips are expected to take place domestically this year—58 million by air alone. That’s up from 55 million last year and is equivalent to the combined populations of Texas, Ohio and New York. China Southern Airlines, the largest carrier in Asia, added as many as 3,600 flights to accommodate the demand.

58 Million Expected Flight Chinese New Year
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As disposable incomes rise in the world’s second-largest economy, travelers are more inclined to take their new year celebrations outside the country. This year, 6 million Chinese tourists are expected to travel abroad and spend more than $14 billion in 147 destinations, the U.S. included. As I’ve mentioned before, China is home to some of the biggest overseas spenders, with 128 million people spending a whopping $292 billion in 2015 alone.

Betting on China’s Surging Middle Class

A theme I’ve written and spoken about frequently is the emergence of new investment opportunities as more and more Chinese citizens join the middle class and build disposable incomes. The size of the Asian giant’s middle class has already exceeded that of America’s. Looking ahead 10 years, the number of Chinese households with incomes over $35,000 is now expected to surge 300 percent, from 40 million today to 160 million by 2025. That projection can be found in a January report from Oxford Economics, which points out that these new middle-class Chinese consumers “will demand more of the services and higher-end products that American companies export.”

Chinas Surging Middle Class Growth Market US Businesses
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“As China’s middle class expands, we expect demand for American-made goods and services to rise as well,” the economic advisory firm writes.

Among those goods are advanced-technology products (ATPs), made in American industries such as robotics, aerospace, electronics and pharmaceuticals. Chinese demand for such goods has indeed risen, from less than 24 percent of total imports in 2002 to close to 34 percent in 2016. However, the U.S. has been losing market share in exporting ATPs to China, according to a report this week from BCA.

Chinas Demand Advanced Technology Products Opportunity US
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Free Trade Has Benefited American Businesses and Consumers