"Our greatest glory is not in never falling, but in rising every time we fall."
-Confucius
. . . . .
Throughout most of recorded history, China was an isolated country. Cut off from other nations by a vast ocean to its east. Jungles to its south. Towering mountain ranges to the west. And frigid steppes to the north.
Despite such isolation, China comprised of the world's largest population. Inhabiting the world's oldest civilization. An agricultural society formed along the Yellow River some 5,000 years ago.

Thus, China has long considered itself Chung-Kuo -- the middle kingdom. The center of the universe. The world's oldest, most important culture and society.
For two millennia, the Chinese empire was its own universe. Ingesting Korea. Vietnam. And other neighboring states. Exerting its cultural influence throughout East Asia and beyond.
Immediately following World War Two, China's GDP ranked among the smallest European states, at roughly $30.55 billion. By 2015, however, China's economic output had exploded. Growing to over $11 trillion. Marked by incredible increases in per capita GDP as China's agrarian economy evolved into a manufacturing marvel. A rising tide capable of lifting all boats.
As it had in centuries gone by.
China has always been blessed with a remarkable entrepreneurial spirit. One that could often superseded its shortcomings in the rule of law.
As Western Society began the 17th century Enlightenment, China was the epicenter of global commerce. Just as it had been at the turn of the first millennium under the rule of the Han Dynasty. A time when European and Middle Eastern traders, merchants, bandits and businessman trekked along the Silk Road to trade with the Asian economies to which it led.
Eventually, in the 20th Century, China looked away from its entrepreneurial past. As Chairman Mao's revolution saw the country turn inward. And close itself off from the outside world.
Over time, China flourished once again, however. Eventually powering not only the network of emerging economies that so relied upon its economic prowess, but empowering the global economy as its economic might surpassed one western nation after the other.
Though it came to be viewed by western observers as an outdated backwater. China played the long game. When the armies of other nations encroached its borders, using superior military technologies to subdue the Asian giant, China bided its time. Recognizing the historical ebb and flow that has long governed the tidal flows of civilization. Patient in its belief that someday, yet again, it would rule all it surveyed.
That day has arrived.
Today, the world's biggest population also ranks among its most ambitious. As millions of rural Chinese have left the countryside. Departing their farms for the opportunities offered in its huge urban cores. China has 102 cities with over one million people. Moreover, she has 43 cities with populations over 3 million.
Whereas China had only twenty years ago positioned itself as the cheap labor manufacturing market for the world, the 2008 Credit Crisis decimated those opportunities. Leaving China's leadership to reposition the economy to one focused on urban real estate. Using tax incentives and favorable lending practices to help those living in the metropolitan areas to participate in the nation's growing wealth through the acquisition and sale of real estate.
Yet, the ruling class grew tired of the cyclical vicissitudes of real estate. With its never-ending boom-and-bust cycles.
Leading to today. As the Chinese government embarks upon the next iteration of its ever-evolving economic story. The largest infrastructure project in the history of civilization. In order to modernize, China will return to its past.
Two thousand years ago, China's Silk Road connected its silk and spice merchants with traders throughout the Far and Middle East, Africa and Europe. Today, China seeks to reprise its Silk Road through the 'One Belt, One Road' project. An undertaking larger than the U.S. Marshall Plan, which oversaw the reconstruction of Europe following World War Two.
As the United States abandons its leadership role on geopolitical initiatives and foregoes trade treaties like the Trans Pacific Partnership, China has committed $4 trillion to connecting itself with trading partners as far west as Europe. Building and bolstering railways, airports, sea ports, highways and every other mode of transportation and logistics in order to connect China's economy with trading partners throughout the world. A massive variant to the old spoke and hub system. With China as the commercial hub. Importing and exporting goods, services and culture the world over.
The "Silk Road Economic Belt and the 21st Century Maritime Silk Road", otherwise known as "One Belt One Road" (OBOR), is a massive development and infrastructure program announced by Chinese President Xi Jingping in 2013. Spanning the entirety of Asia, OBOR will incorporate 60 countries which account for a third of global GDP and 60 percent of the global population.
But OBOR entails more than the building of roads, bridges, ports and air terminals connecting East and West. More critically, it's about China staking a claim as the world's preeminent economic force. Simultaneously cementing China's strategic interests across huge swaths of Central Asia, Eastern Europe and Africa.
Nor is China content with building only infrastructure and trade deals.
Having recently launched the Beijing-based Asian Infrastructure Investment Bank (AIIB) as a counterweight to the western-dominated International Monetary Fund and World Bank. As a development bank, the AIIB will be capitalized by its members. With the proceeds going towards Asia-Pacific infrastructure projects.
The AIIB counts 77 nations among its membership. Including the UK, Australia, India, Russia, Germany, France and Brazil.
Notably missing? The U.S. Which opposed the AIIB's creation from the start.
Prescient investors will benefit as billions of dollars in infrastructure spending present huge opportunities for infrastructure-related companies throughout the world. Chances to work on ports in Sri Lanka. Airports in Nepal. Pipelines. High speed rail. And much more.
Already, we've seen large companies with global reach begin to percolate higher as contract rumors ripple about the globe. Alongside them all will be China's large state-owned firms. Standing to benefit by their size and proximity to the action.
OBOR will serve to propel higher the stocks of China and many other participating nations. However, in words of any infomercial pitchman worth his salt, "But wait, there's more!"
For this investment opportunity is occurring amid a perfect storm. As publicly traded companies seek fortunes chasing trillions of dollars in OBOR contracts, there remains another catalyst that stands to push Chinese stocks even higher.
One that will pour global capital into China's voracious stock markets.
Created in 1988 to track the performance of emerging market stock markets, the MSCI Emerging Market Index consisted of 23 emerging market economies. And the most widely used benchmarkfor companies creating, marketing and selling emerging market index investments.
For years, investors have purchased emerging market equity indexes believing they owned, among other emerging-market stocks, Chinese companies. While Chinese companies comprise more than 25 percent of the MSCI EM Index, that allocation has consisted of American Depository Receipts as well as Chinese firms listed in Hong Kong. Direct ownership of Chinese shares, those traded on the Shanghai and Shenzhen stock exchanges -- called A-Shares -- has been missing since inception.
Each year, MSCI conducts a review to determine whether new geographies should be added. The last additions having occurred in 2014 when the index added United Arab Emirates and Qatar.
That's about to change. At some point in 2017, Chinese A-shares should finally make the cut.
We believe that the right time to purchase any investment occurs with the emergence of three attributes. The investment must be cheap, generally detested or ignored and beginning to rebound.
Investors worldwide have shunned Chinese stocks for two years. And that includes Chinese investors themselves. As many were burnt when the Chinese market collapsed in 2015. Since then, Chinese stocks have dropped 23 percent while the S&P 500 climbed 14 percent. A 37 percent disparity. Leaving Chinese valuations cheap compared to other markets. Moreover, Chinese shares have doubled the performance of the S&P 500 over the trailing three months.
Need further reason to consider Chinese stocks? How's this...
Ten years ago this month, the Chinese large cap index sat in exactly the same spot in which it rests today. During that period, Chinese stocks gained over 100 percent within a year's time on three separate occasions.
As our two aforementioned catalysts proceed and gain publicity, demand for Chinese shares will grow as investors attempt to catch the wind in their sails.
Accordingly, we're happy to discuss the research we've done. And those ideas we are currently acting on. As such dynamic opportunities rarely come along.
The ascension of China's stock market will emulate the ascension of its political and economic prospects. Exciting, steep, and widely influential. It could happen as soon as this quarter. Or, it could happen in two years.
Regardless, financial markets will be impacted the world over. And those presciently positioned will be handsomely rewarded.