Today we read about two of China's energy deals:
1. Liquefied Natural Gas [LNG]. With Australia, China has launched an LNG project in Guangdong Province, next to us perched in Hong Kong. This is Australia's largest ever single trade deal, and the first time that it is allowing China to import LNG. In October 2002, Woodside Petroleum led Australian companies to supply LNG to China over the next 25 years. Contract value: US$25bn. Under the deal, Australia will sell an annual 3.7mn tons of LNG to Shenzhen, Dongguan, Guangzhou, Foshan, Huizhou as well as to Hong Kong. Yesterday, a LNG terminal was opened in Dapeng, Shenzhen. It looks like more Sino-Australian energy deals are in the offing.
2. Hydropower. China's state-owned Sinohydro signed a deal with The Electricity Generating Authority of Thailand (EGAT) to build a US$1bn hydropower station on the Salween River in Myanmar. China, Thailand and Myanmar intend to build a further four such stations along the Salween.
Theme plays have nothing to do with our Economic Clock®, and thus are a good hedge against cyclical undulations: Themes are of longer term, more stable nature.
1. Don't give up on commodities: China and India will need more and more.
2. In Australia, look at companies heavily involved with energy in China such as Woodside Petroleum (OTCPK:WOPEY). One name mentioned above was Woodside Petroleum.
3. Buy Thailand's EGAT: It is helping to build the first of five hydropower stations along Myanmar's Salween River.