Trends Analysis

China’s increasingly perilous inflationary climate is a trend Cornerstone is closely tracking.  Although China’s inflation is not a water industry trend per se, our clients look to us for objective and insightful analysis on how macroeconomic trends might yield opportunities that are favorable to US water-treatment equipment manufacturers.   China’s inflation, and its consequences, is a trend worth tracking.

Cornerstone’s research suggests that inflation (perhaps as a result of a weak currency, cheap money, and one-way expectations) has created the conditions in China for three developments to occur in this year of the rabbit: 1) a substantially stronger RMB, 2) the exit of many domestic equipment manufacturers from the water-treatment equipment business, and unfortunately for the Chinese people 3) increasing number of water pollution-related accidents.

Considering the size of China’s water-treatment market, these three developments are creating a window of opportunity that is huge; however, it is only relevant for water-industry executives who are prepared to pursue China’s notoriously challenging water-treatment market.

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