Risks of investing in a developing market
I’d love to invest in a market that is growing at 15% per annum (like the Chinese plastic pipe market) — and yet, even with that growth, competition has become cut throat.
But more disturbing is the subtle undertone in the article about environmental risks. It is very heartening to see China making forward-thinking commitments for ecological (and health) reasons. But it makes you realise that if you’re investing in the Chinese real estate market, you might be building with the 2005 equivalent of asbestos — leaving you with an expensive oversight to correct down the track.
I mean, really, who would think to check what heat stabiliser they were using in manufacturing their PVC?! On the other hand, I suppose it’s not dissimilar to the playgrounds built with wood that was chemically treated with toxic chemicals — a relatively recently identified shortsightedness. Every investment comes with risks, the best we can do is to research thoroughly and insure appropriately.