“Do you think that the arguments in this article in the FT suggest that it is too early to invest in the Chinese stock market? On the other hand, the boost that the Chinese government is giving to domestic demand seems to make such an investment attractive.”

Eoin Treacy's view Thank you for this interesting question. In some of my more enthusiastic moments I have called the Z Corp rep to price 3-D printers with a view to getting one for myself. Of course it would probably sit around the office collecting dust once the initial buzz had worn off and my non-existent programming skills were highlighted. The five figure price tag would then seem a boondoggle but one can dream.

Despite my personal limitations, the potential of additive manufacturing to change the industrial landscape over the next couple of decades is undiminished. Additive manufacturing greatly increases the speed of prototyping and allows for a degree of customisability that was previously unimagined. A news item appeared in Comment of the Day on March 7th relating to how Nike is planning to build factories in the USA to manufacture customised shoes where the 3-D images will be taken inside their store and relayed to the factory floor. This offers a useful insight into the future of manufacturing

While additive manufacturing represents the exciting future, the global manufacturing sector is still skewed in favour of low labour costs. The differentiation between what can be replaced with technology and what can't is likely to form an important investment theme over the next decade particularly in view of the USA's competitive energy prices. (Also see David's piece on robots and factory automation in Comment of the Day on August 21st) .

This evolution also highlights not only the desirability but the necessity of China developing its own domestic demand sector. If the country is to realise its ambition of becoming a major economic superpower beyond its capacity to supply cheap labour, its upward trajectory in the manufacturing value chain is more important than ever. I would not bet against its ability to succeed in this objective and the stock market is currently at a very attractive valuation from an historic perspective.

The Shanghai A-Share Index has probably bottomed and a sustained move below 2200 would be required to question that hypothesis. The Hong Kong listed H-Shares Index failed to sustain the downward break last week and has returned to test the upper side of the overhead range. A clear downward dynamic would now be required to question potential for a successful upward break.