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Bernard M - English Conversation / TOEFL / IELTS 一對一英文會話

Wednesday, June 27, 2007

Interview with Jim Rogers

Jim Rogers: "China Is Making Investors Rich"


Jim Rogers is considered one of today's most prominent market observers. The American earned the bulk of his credibility through his own professional exploits. By the young age of 37, he had already achieved his childhood dream, which was to accumulate enough wealth by the age of 40 to go into early retirement. This was made possible by the Quantum Hedge Fund, which he co-founded and whose asset value appreciated 4200 percent within the span of a decade. Mr. Rogers' subsequent endeavors included stints as a bestselling author, as a guest professor at Columbia University and as a globetrotter who circled the world twice, once by motorcycle and once by car. To the broad investor community, Mr. Rogers is now mainly known as a commodity guru. His credo is that commodities are in the midst of a long-term bull market that will easily last for another ten or more years. He has likewise earned loads of money so far with that assertion, which - like so many of his statements - contradicts the views of most analysts. In fact, his self-created Jim Rogers International Commodity Index has climbed 250 percent since 1998.

Mr. Rogers has a similarly adamant opinion on the future potential of China, which he says is on its way to becoming the superpower of the 21st century. Mr. Rogers' faith in China's ascent is so fervid that, when his daughter was born, he hired a Chinese nanny to ensure that his child learned to speak Chinese from the cradle. In Focus met Jim Rogers in late March in Hong Kong at the Credit Suisse Asian Investment Conference, where he delivered one of his famously witty and highly entertaining speeches.

Mr. Rogers, how is your young daughter's Chinese?
Very good. She is barely four years old, but she already speaks Chinese like a native. I've just bought her 25 DVDs in Chinese, as Chinese DVDs are hard to find in New York. We do not have a television at home. She only gets to watch Chinese stories on DVD.

That's a rather unconventional education method.
True. But for me it was obvious: the most sensible skill that I can give to somebody born in 2003 is a perfect command of Mandarin.

With so much admiration for China, one would think that you would have moved here long ago.
I'm definitely entertaining the idea. I would very much like to relocate to a Chinese-speaking city, which is why I'm trying to sell my house in New York. The future is here.

What makes you so confident?
China has had many successful periods in its history. Naturally, it has also gone through some disastrous stages. For instance, the country experienced a nearly 300-year decline that didn't end until 1978, when Deng Xiaoping took over the helm and reintroduced capitalism and free enterprise. For whatever reason, the Chinese appear to be very successful capitalists. They work hard, they save a lot and invest just as much. They know how you live in Switzerland, and that's exactly the way they want to live. So they're willing to work, save and invest as much as necessary to attain that lifestyle. There are 1.3 billion Chinese in China and another couple of hundred million outside China who possess a wealth of expertise and capital, and are now pouring it back into the country to help it further develop. It's all coming together.

China is already struggling with huge environmental problems even though the country's per capita consumption is still modest and, for example, only a minority of its 1.3 billion population owns a car. Doesn't the environment pose a potential impediment to China's development?
It will certainly have a massive impact on the environment if 1.3 billion Chinese drive cars, run air conditioners, buy trendy clothes or alter their eating habits. Is that a problem? I don't know, I'm not a scientist. There are many people who claim that automobiles have no effect at all on climate change. But there's no doubt about it: when 1.3 billion consumers come into the world market, that's going to have major consequences in any case, whatever they may be. Looking at Asia as a whole, we're actually talking about 3 billion new consumers.

Why isn't there a Jim Rogers Investment Fund for China?
Well, a Chinese investment fund would force me to go back to work (sighs), and there are just too many other things that I have much more fun doing.

How can investors profit from the rise of China?
The best way to profit from the rise of China is to buy commodities. Because the Chinese NEED commodities. If you own nickel, they will pay you on time, they will be nice to you, and they will take you out to dinner. You can of course also buy the shares of natural-resource companies, and if you are really good at it and pick the right stocks, you will make a fortune in China. But then you will have to worry about the stock market, the management, the central bank, labor unions and a hundred other things. If you simply buy nickel, you don't have to worry about any of that.

Does your optimism also carry over to India?
Not at all. India has a horrible economic system. Indian politicians are of course now talking the right concepts and are trying to implement them, but a lot goes wrong when they are put into practice and run up against the country's thoroughly anti-capitalist bureaucracy. For instance, India recently curtailed its commodity markets on the grounds that they were allegedly causing galloping inflation, which of course is completely crazy. In truth, prices are rising solely because the government is making a lot of mistakes and printing tons of money. But politicians prefer to put the blame on evil capitalists rather than on themselves. The country's terrible infrastructure is another argument against India. One example: the port of Shanghai alone handled 21 million containers last year; in contrast, all of India's ports combined handled only 5 million containers. India is not a place for investors, but it's a fabulous country for tourists. If you could only visit one country in the world, I would urge you to go to India.

Do you think that the rise of China is a win-win situation for the West?
In principle, the rise of any country should represent a win-win situation. Unfortunately, history teaches us the opposite: oftentimes, when a new country ascended economically, sooner or later that coincided with the decline of the countries that were previously dominant and often conflict Hopefully, that won't happen so quickly this time. Sadly, however, there are incompetent politicians everywhere doing crazy things.

Could some countries suffer more than others as a result of a strengthening China?
Yes, certainly. There are Americans who say the US is suffering from the rise of China, while Japan and Europe are delighted by this development. Japan does huge trade with China, as does Europe, and both also run a trade surplus with China. Vietnam and South Korea as well owe their current boom partly to the fact that they have an increasingly rich neighbor. The US, too, actually has to be benefiting, but America really hasn't understood that yet.

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