A more open China market should also benefit global consumer product and services companies. Inflation will probably remain near zero over the rest of the decade. The risk is deflation, not reflation. Peace, free trade, competition, deregulation, technology, and China are all powerful sources of deflation. Productivity-led deflation can be profitable.
Unprofitable deflation can cause a prolonged recession.
Invest in Treasury bonds and interest-rate sensitive stocks, with low exposure to credit risk if possible. Populations will age significantly in Japan, Germany, and the United States over the next two decades. Expect more pressure on politicians in aging nations to cut tax rates, to boost savings incentives, and to encourage equity investments. Invest in asset management companies and, of course, health care providers. Populations remain relatively young in most of Asia, Latin America, and the Middle East.