‘I have sold all emerging markets except China’: Jim Rogers

Date: Wednesday, March 12, 2008
Author: D Murali & Kumar Shankar Roy, The Hindu

Chennai: The 21 per cent year-to-date decline of the Shanghai Composite Index notwithstanding, American investor and investment guru, Mr Jim Rogers, remains optimistic on the prospects of China.

When Business Line queried him, over the e-mail, about his views on India emerging as a strong competitor to China as a major manufacturing hub, Mr Rogers said, “I can see little reason anyone would open in India, instead of China.”

The author of books like ‘Adventure Capitalist’, ‘Hot Commodities’ and more recently ‘A Bull in China’, Mr Rogers is hopeful of a soft impact of an US economic slowdown on China. “It does for sectors which do business with the US, especially since the Chinese government is rightly trying to slow things down. Other sectors will not be affected,” he said in course of the brief interview.

The strong arm of Chinese government control may aggravate fears of foreign investor but not him. “Look at the results of the many who are there.” But is the country a safe investment destination? The 65-year old expert holds the opinion that China is as safe as most places these days, especially if one is in for the long term. “There is virtually no foreign money invested in the Chinese markets because of (Government) controls. But huge outflows from any market have an effect,” Mr Rogers averred.

With many in West tagging the present boom in emerging stock markets as a bubble, the creator of Rogers International Commodity Index (RICI) has his own argument. “I have sold all emerging markets except China, “ said the man whose favourite Chinese proverb means ‘buy low and sell high’.

But how would the Chinese companies maintain their edge over others when it comes to quality and not necessarily cost, Mr. Rogers said, “They are improving annually and are now better than all but a few countries in the world.” One should always only invest where things are improving, the original co-founder of famous ‘Quantum Fund’ added.