Skip to main content

China business: 'Mao is not coming back'

By Anjani Trivedi, for CNN
November 15, 2012 -- Updated 1408 GMT (2208 HKT)
STORY HIGHLIGHTS
  • Mr. 'BRIC': I do have some concerns about China
  • Hu Jintao makes target for 2020 to double per capita income in China from 2010 levels
  • Rogers foresees China opening up its economy to foreign investment
  • Both O'Neill and Rogers have a dismal outlook on the U.S. and the world at large

Hong Kong (CNN) -- As the world's second biggest economy undergoes a once in a decade leadership change, experts are encouraged by the prospects of reform and increasing business in China, despite its slowing economy and daunting social problems.

"I do have some concerns, particularly given how important China has become to the world and obviously, given my own personal past with the whole being 'Mr. BRIC' thing, I frequently worry that I'm missing something about China," Jim O'Neill, Chairman of Goldman Sachs Asset Management, told CNN. O'Neill is credited with coining the BRIC -- Brazil, Russia, India and China -- acronym, which has become synonymous with the rising economic tide of the developing world.

"But that being said, when I look at what (outgoing leader Hu Jintao) said ... I'm rather encouraged by the things he specifically referred to, in particular the apparent desire to ensure that migrant workers get full urban rights. I think that is a big thing at the center of further urbanization," O'Neill said.

President Hu, in his keynote speech at the 18th Chinese National Congress on Thursday, emphasized the central role of economic development and striking a balance between the government and financial markets. He made an ambitious target for 2020 to double per capita income in China from 2010 levels for both rural and urban dwellers -- the first time a resident's per capita income has been included in economic targets, state-run media Xinhua notes.

"We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace, and expand the domestic market," the Chinese leader said.

O'Neill: Excited about China's future
Investor: U.S. economy will slow down
Can China's new leader maintain growth?

Famed investor Jim Rogers, author of the book, "A Bull in China: Investing Profitable in the World's Best Market," believes that despite allegations of trade inequities and the value of the Chinese currency, China's new leadership will oversee a further opening of the market and its 1.3 billion customers to western firms.

"They are going to continue to open up. They are going to open the currency sometime during his [Xi Jinping] regime. They are going to open up more and more to outside investment, they are going to open up more and more to outside trading on the exchanges," Rogers said. "Mao Zedong is not coming back."

The Governor Zhou of the Chinese central bank also reaffirmed his positive outlook despite a slowing economy. "It has become increasingly clear that the Chinese economy is now moving towards a better direction," he said while speaking at the National Congress yesterday, according to state-run news agency Xinhua.

"As the government adopted a series of fiscal and monetary measures and accelerated the approvals of investment projects to spur the slowing economy, the domestic economy has stabilized since September with better indicators," Zhou said. On Friday, the government reported inflation was 1.7% in October, nearing a three-year low.

While both O'Neill and Rogers have a dismal outlook on the U.S. and the world at large, O'Neill believes the emerging markets have much to learn from China decision making.

"A lot of these guys blame the West for their problems, but if you look at China their trade surplus has dropped from 10% of GDP to 2.5%, and for China to still be growing at close to 8% despite that is a spectacular achievement," O'Neill said.

ADVERTISEMENT
Part of complete coverage on
February 6, 2013 -- Updated 1526 GMT (2326 HKT)
Advocates say the exam includes unnecessarily invasive and irrelevant procedures -- like a so-called "two finger" test.
February 6, 2013 -- Updated 0009 GMT (0809 HKT)
Supplies of food, clothing and fuel are running short in Damascus and people are going hungry as the civil war drags on.
February 6, 2013 -- Updated 1801 GMT (0201 HKT)
Supporters of Richard III want a reconstruction of his head to bring a human aspect to a leader portrayed as a murderous villain.
February 5, 2013 -- Updated 1548 GMT (2348 HKT)
Robert Fowler spent 130 days held hostage by the same al Qaeda group that was behind the Algeria massacre. He shares his experience.
February 6, 2013 -- Updated 0507 GMT (1307 HKT)
As "We are the World" plays, a video shows what looks like a nuclear attack on the U.S. Jim Clancy reports on a bizarre video from North Korea.
The relationship is, once again, cold enough to make Obama's much-trumpeted "reset" in Russian-U.S. relations seem thoroughly off the rails.
Ten years on, what do you think the Iraq war has changed in you, and in your country? Send us your thoughts and experiences.
February 5, 2013 -- Updated 1215 GMT (2015 HKT)
Musician Daniela Mercury has sold more than 12 million albums worldwide over a career span of nearly 30 years.
Photojournalist Alison Wright travelled the world to capture its many faces in her latest book, "Face to Face: Portraits of the Human Spirit."
February 6, 2013 -- Updated 0006 GMT (0806 HKT)
Europol claims 380 soccer matches, including top level ones, were fixed - as the scandal widens, CNN's Dan Rivers looks at how it's done.
February 6, 2013 -- Updated 1237 GMT (2037 HKT)
That galaxy far, far away is apparently bigger than first thought. The "Star Wars" franchise will get two spinoff movies, Disney announced.
February 8, 2013 -- Updated 0718 GMT (1518 HKT)
It's an essential part of any trip, an activity we all take part in. Yet almost none of us are any good at it. Souvenir buying is too often an obligatory slog.
ADVERTISEMENT