In­vestor Rogers sounds eco­nomic note of cau­tion

China Daily (USA) - - BUSINESS - By DUAN TING in Hong Kong tingduan@chi­nadai­lyhk.com

Jim Rogers, renowned US in­vestor and co-founder of Quan­tum Fund, said he has deep con­cerns about the global econ­omy’s health in the next three years.

Chi­nese com­pa­nies should con­trol both their ex­po­sure to Western mar­kets and in­ter­nal debt, he said in an in­ter­view with China Daily in Hong Kong last week.

The next year will see “prob­lem­sand­sur­prises” as the economies of Ja­pan, Rus­sia, Brazil, the United States and Europe will likely get worse, af­fect­ing Chi­nese com­pa­nies, he said.

Ma­jor Western coun­tries are al­ready suf­fer­ing from a par­tial re­ces­sion. Un­cer­tainty will deepen next year, he said.

China is the largest trad­ing coun­try, and will be next great econ­omy in the world. But as the rest of the world has prob­lems, China may not be able to Jim Rogers, avoid a set­back on the global front, Rogers said.

China will have to take the chal­lenge of man­ag­ing its debt levels at the same time, he cau­tioned, adding that a ma­jor fun­da­men­tal change in theChi­nese econ­omy is the in­creas­ing debt of in­di­vid­u­als, com­pa­nies and pro­vin­cial gov­ern­ments, a far cry from the past.

“There is noth­ing wrong with debt if you man­age it prop­erly,” Rogers said. “If you bor­rowed the money for pro­duc­tive rea­sons to build fac­to­ries, im­prove ef­fi­ciency, earn sales, make prof­its and pay off the debts, it’s great. But if you didn’t or make mis­takes, such as to seek toomuch­ex­pan­sion, you will suf­fer.”

Rogers said he prefers in­vest­ing in com­pa­nies in the busi­ness of pol­lu­tion con­trol, health­care, agri­cul­ture, along with those aligned with the gov­ern­ment pro­gram to strengthen ties with coun­tries on the old Silk Road. “I think those com­pa­nies will do well, no mat­ter what hap­pens.

“I am bullish on agri­cul­ture ev­ery­where, es­pe­cially in China, as it has been de­pressed for 30 years glob­ally.”

He said the prop­erty mar­ket in China ap­pears over­priced and a bub­ble may have formed. “If you want to buy prop­erty, go to the farm, the ru­ral ar­eas and coun­try­side.”

He be­lieves tech­nol­ogy is be­com­ing a great driver of the econ­omy. Two decades ago, it was the US and Europe that led tech­nol­ogy. But now, China is set to pro­duce 10 times as many engi­neers as theUS had. And, in the next cou­ple of decades, it will be­come a leader in tech­nol­ogy, he said.

As for his in­vest­ment pref­er­ences, Rogers said: “I am not buy­ing eq­ui­ties and bonds any­where, but may in­vest in agri­cul­ture com­modi­ties. I own gold but am not buy­ing gold and wait­ing for its price to fall down to buy a lot more.”

I am bullish on agri­cul­ture ev­ery­where, es­pe­cially in China.” co-founder of Quan­tum Fund

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