Transcription
What kind of shape is China in? And if the US falters, can China provide growth for the global economy?
Yeah, China today is in a mode where it's unlikely that it to provide growth for the global economy as it did say in 2010, 2011 and on previous occasions. But its economy by itself is uh doing okay. It's not doing particularly well in one sector, and that is real estate. This is still an overhang.
Mhm.
But because prices have come down, real estate has become more affordable. So that is a positive. And the economy is uh now essentially facing an obstacle to growth. And this is a declining population.
Mhm.
Uh and especially a declining population of young people. But the Chinese uh as you know and this most people just don't seem to realize uh in many sectors of the economy the Chinese are way ahead of the Western world. But miles ahead in terms of technology. You look at cars. I mean, in theory, the Chinese car industry could put out the entire Western car industry out of business. Because they can produce cars at about half the price of Western companies. I mean, it's amazing, and they are technologically very advanced. And in other sectors, it's the same story. That's why when people tell me about the bright future of AI and so forth, yeah, maybe. But maybe the Chinese will produce or India, you know, people don't talk about India, but in India, they also have more than a billion people and they have per million people one genius. We also have a genius per 1 million people, but in Switzerland with a population of 8 million or 10 million, we only have eight geniuses and
[laughter]
a thousand.
Don't Don't tell Don't tell Switzerland that. Uh it's true, but all of those Well, more more in the case of of China, I suppose, um it's able to to dominate because it's able to keep prices low, right? It's it's it's export power. But in order to do that, you can't have a robust domestic consumption or pay higher wages. It's sort of caught between those two forces, isn't it? Does that limit it? Cuz it always says it wants to it grow its middle class, grow consumption domestically, but in order to unless robotics will solve that problem.
No, the robots will not solve the problem. But uh given that the population is declining, you sort of need robots. And uh there are lots of activities that robots can do better than a human. I mean, I'm I'm sure that
And that keeps the cost down. That enables them to continue to be an export giant.
Yes, and to invent. I mean, the the the view in the Western world is still China produces Nike shoes and sell it to Nike and Nike distributes it in the US and so forth. But this is I mean, the the the Chinese uh have a lot of innovation and inventions. And, I think the world will be surprised by the advances the economic advances that are occurring outside Europe and the US.
Mhm.
I mean,
Do you like Do you invest in China? Do you think that's a a destination? Is that investable?
Yes, it's investable. And, uh I think one way for investors to participate in China is to actually buy Hong Kong shares.
Mhm.
Because, it's sort of a warrant on China. And, uh the city Of course, real estate came down and there was a a problem in real estate and to some extent is still existing. But, I look at cities in England and in Germany and in to Baltimore and San Francisco
[laughter]
and and Chicago and Cleveland in America. Then, I tell you when you have a family and children that go to school, maybe you actually quite enjoy that your children can walk to school and not need a bodyguard to take them to school and back to your home. And, that you don't need three guards to to look after your house uh when you're sleeping at night. You understand? The safety of Hong Kong and Singapore and also Bangkok, incidentally, is very high in relative to everything else. I mean, I shouldn't say this on TV, but I don't have a key to my office and to my house. My door is always open.
I think we will have to edit that out, Mark.
[laughter]
Thankfully, they don't know they don't know your address and it's not that easy to get to.
They don't know where I hold my gold.
[laughter]
That's right. More importantly, where you hold your gold.
They don't know that they have three crocodiles in the garden.
[laughter]