Photo: jimrogers.com
Main reference: Story in Yangcheng Daily
Singapore-based investor Jim Rogers – not a big fan of the US dollar or investing in consumer plays these days – is well known for his bullish take on commodities and mining.
That’s because he says the global economy is going to go back to the basics and value firms that actually produce things.
But how does the Baltimore-born baron of the bourses feel about the property market in the world’s most populous country?
Rogers, who has called Singapore home since 2007 and is best known for co-founding the Quantum Fund with George Soros, said he was adopting a wait and see attitude on Chinese real estate.
“I’m not sure where the PRC property market is headed right now so I am calmly watching trends from the sidelines,” he said at a recent investment conference in the southern Chinese city of Guangzhou.
He confessed he “didn’t understand” the current real estate scenario in Mainland China but believed that “buying farming assets or gold was better than investing in (residential and commercial) property” these days.
The American investor expressed confidence in China’s economic growth going forward, adding that his daughter was immersed in her Mandarin studies in anticipation of the rise of the PRC.
“She can speak like a native Chinese,” he boasted to the audience, adding that he hoped his daughter would choose to study at a Chinese university sometime in the future.
While comments like these bring smiles and chuckles from a roomful of government officials and economists, they do represent a strong vote of confidence in China’s economic growth prospects by one of the world’s best-known investors.
Rogers said that the renminbi needed to open up even further, and that following such changes, China’s currency could one day come to replace the US dollar’s position of global prominence.
Because of uncertainty on the global financial stage and his anticipation of troubles for the greenback down the road, he was bullish on bullion and agriculture.
“The price of gold has shot up 800% over the past three years. At the same time, agriculture is becoming an increasingly key component of not only China’s economic growth, but that of the entire world,” Rogers said.
He added that was why he was more upbeat on agriculture property than commercial or residential property in China these days.
As for China’s hot or cold but never room temperature real estate sector, Rogers said he was still trying to figure out the industry.
He also said that the level of private investment in property in China was “not high,” and this provided potential opportunities.
Rogers said that the consensus among industry experts was that things would be getting better for China’s property sector.
Speaking alongside Rogers, Wang Yiming of China’s NDRC said the country’s historic urbanization drive fuelled by mass migration from the countryside to the cities was far from over.
“The growing attention on the domestic market means that Chinese consumers will need more commercial properties. I see a lot of space for development in this area,” said Wang.
He compared China’s property market to Europe to point to untapped potential.
“In the average Italian family, only about 13% of the household wealth is invested in financial assets, with most of the remainder invested in real estate.
“In China, however, the average family’s investment is 35% committed to financial investments with around just 60% invested in property.”
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