China-watchers optimistic about country’s growth and switch to market economy
Asia Society business conference ——————————–
DESPITE serious problems of high inflation, massive unemployment and loss-making state enterprises, a panel of China-watchers yesterday was upbeat about China’s continued growth and reforms to become a market economy.
The panel members said the vast business opportunities for foreign investment and China’s commitment to open up its economy outweighed the structural disadvantages the country faced.
One of the three panelists, Mr Koh Boon Hwee, the executive chairman of Wuthelam Holdings, advised investors to go for the long term.
“Don’t believe that there is a window of opportunity that opens temporarily, and shuts abruptly. The fear of being left out if you do not jump in now is irrational.”
He told about 800 delegates attending the final day of the Asia Society’s business conference that China had an inexhaustible supply of land and labour.
“It is a huge and diverse market with more than enough investment opportunities for every serious investor, for the rest of our lifetime,” said Mr Koh, who is also the chairman of Singapore Telecom.
“For those of us who are already in it, we press ahead. For those waiting at the docks, you have to choose your moments to set sail, hopefully when waters are calm,” he said.
Discussing the downside of doing business in China, he said the country still did not have the fine-tuning tools to manage its huge economy. The Chinese market was fragmented because of its sheer size and the lack of communication infrastructure.
Because of cultural and regional differences, what worked in one place might not necessarily work in another, he said.
Panelist Lyn Edinger, vice-president of Nortel World Trade, a US telecommunication firm, said China needed huge investments in its infrastructure over the next 10 years.
He said China’s power industry, which he described as the biggest in history, would need 15 to 20 nuclear power stations each year until the turn of the century.
He noted that the Chinese government had committed to spend US$70 billion (S$107 billion) to extend rail tracks across the country.
It was also planning to build 100 airports by the year 2000 and buy 800 commercial aircraft. US businesses must be a player in China for their long-term health, he concluded.
Another panellist, Mr Peter Clarke, chairman of Merrill Lynch’s Asia Pacific region, said China must be given time to make the many changes in its economy.