Asia Society – New York
The analyses of China’s economic performance over the last 35 years have usually ranged from gloomy to very gloomy to very bad to disastrous. You can pick whichever one of those you like. The result has been different. It has ranged from good to very good to pretty reasonable to fantastic, depending on which season you look at. And so, for people to begin to assume that this will somehow just begin to implode upon itself, I think suspends rationality. My argument overall is –notwithstanding all the things that could go wrong with the Chinese economy – number one, there is currently a battle plan on the part of the authorities in Beijing about how to deal with each of its emerging structural economic challenges and, number two, sufficient bureaucratic and policy expertize and depth to be able to marshal policy shifts quickly in the event of real problems emerging. My on balance judgement is, you won’t see a replication of 10% growth in the future, you won’t see a replication of 8% growth in the future, but consistent with China’s economic development for the decade ahead it is, I think, entirely conceivable and probable that we will see growth north of 6% per annum. If you’ve got an economy of that size growing at that level of intensity for a decade ahead, let me tell you, China will be wielding sufficient economic power and influence in the world.
I think the business opportunities which will emerge will be to work with Chinese investors and the rest of the world in third country markets. China now has an increasing pool of investment capital which can either go to opportunities at home or opportunities in the region and the world. So if I was in the business of investing, for example, I’d be looking at where the Chinese are investing and perhaps co-investing with them in the large infrastructure projects which are emerging across Asia – what the Chinese call their ‘New Silk Road’ initiative.