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10 Junior Miners Doing Business With China

SOURCE:[Metal Investment News] - Despite jitters from Wall Street, China’s exports are rising at twice the rate predicted by economists.

China’s foreign exchange reserves rose to $3.29 trillion at the end of September, 2012 from $3.24 trillion a month earlier.

The FTSE China 25 Index Fund (FXI-NYSE) has $5.2 billion in assets under management. It holds 26 China focussed companies including CNOOC (CEO-NYSE) and PetroChina (PTR-NYSE).  Trading an average of 13 million shares a day, FXI has been trending up sharply since the end of summer.

Total Foreign Investment from China has reached $70 billion.

According to The World Bank, the number of 1 million-plus cities in China will increase from 100 to 220 in the next two decades.  To sustain this growth the Chinese will need to secure supply chains of copper, iron ore, potash, oil, zinc, silver, etc.

In 2011, China invested about $6 billion in the Canadian Resource Sector. In a Metal Investment News survey of Chinese QDII fund managers, a mantra emerged: “Controlled Risk”.

“We are looking for mid and late-stage projects,” said one Shenzhen-based fund manager, “We don’t mind waiting three years to get our money out, but we will not invest in countries where the government could take over the project”.

Since the Chinese are diligent researchers – and most North American investors are also trying to “control risk” – it is instructive to look at 10 junior miners that are already doing business with the Chinese.

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