Beijing will beat recession ahead of others: Rogers
Bloomberg 10 March 2009
China’s stimulus spending will help its economy overcome the global recession sooner than the US and other countries, investor Jim Rogers said.
China’s reserves allow the government to spend on projects that will make the nation more efficient and competitive as the global economy recovers, said Mr. Rogers, the author of A Bull in China: Investing Profitably in the World’s Greatest Market. Signs that China is taking steps to liberalise its currency will also benefit the country, he added.
‘I certainly expect China to come out of it sooner than the US,’ Mr. Rogers, chairman of Singapore-based Rogers Holdings, said in a Bloomberg TV interview in the city-state. ‘They seem to be spending the money on the right things. China is doing a far better job than the others.’
Premier Wen Jiabao reiterated last week the government’s pledge to ‘significantly increase’ investment in 2009 to help counter the slowest growth in seven years. He didn’t specify new stimulus spending in addition to a four trillion yuan (S$906 billion) plan announced in November.
The People’s Bank of China cut interest rates five times in the final four months of last year, including the biggest single reduction since the 1997-98 Asian financial crisis. The government is targeting growth of 8 per cent in 2009, after the economy slowed to a 6.8 per cent gain in the fourth quarter.
China will allow trade settlement in yuan with Hong Kong soon, central bank governor Zhou Xiaochuan said at a briefing in Beijing on March 6. President Li Lihui of Bank of China Ltd, the nation’s largest foreign-exchange lender, said on Sunday in Beijing that the bank is already conducting trial international yuan settlements in Shanghai and Hong Kong.
‘I’m glad to see they’re taking yet another step towards convertibility,’ said Mr. Rogers, who in April 2006 accurately predicted oil would reach US$100 a barrel and gold US$1,000 an ounce. He said he owns Japanese yen as he expects more of the money to ‘come home’. Mr. Rogers added he plans to sell his remaining US dollar holdings later this year because the world’s largest economy isn’t a ‘safe haven’ for investors.
‘I plan later this year to get out of the rest of my US dollars,’ he said. ‘It’s had an artificial rally too but it’s a terribly flawed currency. The US is printing money as fast as it can and that’s always throughout history led to currency problems down the road.’
Mr. Rogers on June 30 advised investors to avoid the dollar ‘at all costs’ as the US economy slows, and favoured commodities. The dollar has risen against nine of the Group of 10 currencies since then, according to data tracked by Bloomberg.
Mr. Rogers added he remains bullish on agriculture and that commodities are ‘the only area of the world economy I know which is benefiting’.
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Beijing will beat recession ahead of others: Rogers
Bloomberg
10 March 2009
China’s stimulus spending will help its economy overcome the global recession sooner than the US and other countries, investor Jim Rogers said.
China’s reserves allow the government to spend on projects that will make the nation more efficient and competitive as the global economy recovers, said Mr. Rogers, the author of A Bull in China: Investing Profitably in the World’s Greatest Market. Signs that China is taking steps to liberalise its currency will also benefit the country, he added.
‘I certainly expect China to come out of it sooner than the US,’ Mr. Rogers, chairman of Singapore-based Rogers Holdings, said in a Bloomberg TV interview in the city-state. ‘They seem to be spending the money on the right things. China is doing a far better job than the others.’
Premier Wen Jiabao reiterated last week the government’s pledge to ‘significantly increase’ investment in 2009 to help counter the slowest growth in seven years. He didn’t specify new stimulus spending in addition to a four trillion yuan (S$906 billion) plan announced in November.
The People’s Bank of China cut interest rates five times in the final four months of last year, including the biggest single reduction since the 1997-98 Asian financial crisis. The government is targeting growth of 8 per cent in 2009, after the economy slowed to a 6.8 per cent gain in the fourth quarter.
China will allow trade settlement in yuan with Hong Kong soon, central bank governor Zhou Xiaochuan said at a briefing in Beijing on March 6. President Li Lihui of Bank of China Ltd, the nation’s largest foreign-exchange lender, said on Sunday in Beijing that the bank is already conducting trial international yuan settlements in Shanghai and Hong Kong.
‘I’m glad to see they’re taking yet another step towards convertibility,’ said Mr. Rogers, who in April 2006 accurately predicted oil would reach US$100 a barrel and gold US$1,000 an ounce. He said he owns Japanese yen as he expects more of the money to ‘come home’. Mr. Rogers added he plans to sell his remaining US dollar holdings later this year because the world’s largest economy isn’t a ‘safe haven’ for investors.
‘I plan later this year to get out of the rest of my US dollars,’ he said. ‘It’s had an artificial rally too but it’s a terribly flawed currency. The US is printing money as fast as it can and that’s always throughout history led to currency problems down the road.’
Mr. Rogers on June 30 advised investors to avoid the dollar ‘at all costs’ as the US economy slows, and favoured commodities. The dollar has risen against nine of the Group of 10 currencies since then, according to data tracked by Bloomberg.
Mr. Rogers added he remains bullish on agriculture and that commodities are ‘the only area of the world economy I know which is benefiting’.
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