Business Insider recently spoke with investment guru Jim Rogers on a myriad of issues. Yesterday, we shared with you Roger’s thoughts on commodities and the U.S. economy. Today, we share with you his bullish perspective on China.
You’re a China bull. Could you tell me the one thing that you think China bears have got wrong?
Not quite sure. If you mean the people who say China is going to explode. Those guys have been saying that for three years. I guess someday they’ll be right. So far they’ve been dead wrong, for years. There will be setbacks in China along the way. In America in the19th century we had 15 depressions with a capital “D,” we had no human rights, we had not much rule of law, (and we) had a horrible civil war, yet we became the most successful country in the 20th century.
China is going to have plenty of setbacks but what these guys are mainly missing is China has been in decline for three or four hundred years but started turning it around in 1978. And there’s a long history of entrepreneurship, capitalism, they have the brains, they have the know-how, there are many overseas Chinese who will bring back money and management ability. And the Chinese have a very, very high savings rate. They save over 35 per cent of their income and so even if they start going off, they’ve got something to fall back on, as opposed to America and the rest of the world.
Photo: Charlie Rose
There was a housing bubble in urban, coastal real estate, which the government has popped purposely, I mean they knew what they were doing. But as far as, I mean Jim Chanos, says it’s going to be a thousand times worse than Dubai. Well that shows he doesn’t understand Dubai, and he doesn’t understand China. Now I’ve told him this to his face though, so I’m not talking behind his back. China is vastly different from Dubai, vastly. Could you explain how Dubai and China’s real estate property problems differ?
Dubai was building its plan, its economic plan was to build an economy based on real estate speculation. It didn’t have anything else. It didn’t have oil, natural resources, it had a small population etc. and there was gigantic real estate speculation in construction. China has huge amounts of stuff. It has a growing population. It has vast natural resources, not enough, but it’s got some. And then all those natural resources in Siberia which they can tap and they’ve got huge financial reserves. Dubai does not. Dubai has a rich big brother, but that’s all Dubai has and China has it all – resources, cheap labour, discipline, educated labour and vast markets.
China lowered their growth rate, wage inflation is worrying and it’s the year of leadership change. Do you think China is in control in terms of their property prices and economic growth…
I doubt the government planned to have a bubble. They got a bubble. I mean they’ve been trying to cool it off and they’ve done so. As far as the lower growth rates, I don’t pay attention to government growth figures because they’re all phony. Nobody knows how much China is growing, including China. I don’t pay attention to all of these figures. They’re not important to me. They’re irrelevant. China is certainly doing better than most countries and it will continue to do so. It will have setbacks. There’s nothing that says China should not have a recession. But China has a lot of money saved for a rainy day and when it rains they’re going to spend. America doesn’t have any money saved for a rainy day. And when it rains we’re going to try to borrow it or print it, neither of which is good for America or for the world.
Click here for the first instalment of our interview with Jim Rogers which focused on commodities and the global economy >
Stay tuned to Business Insider for further installments from our exclusive interview.
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