- 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
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.
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.