Business leaders in US confident about Chinese economic growth

Source:Xinhua Published: 2019/5/15 19:18:41

Optimism about the Chinese economy is shared by both private sector and international financial institutions in the US, which have given a vote of confidence through their words and actions.

US venture capitalists increased their investment in Chinese start-ups last year, with the venture capital (VC) flows between the US and China hitting an estimated $22 billion, according to a report released last week by the US-China Investment Project, which is led by the Rhodium Group and the National Committee on US-China Relations (NCUSCR).

The rise of VC investments was mostly driven by US-owned firms, which poured a record $19 billion into Chinese start-ups in 2018, roughly doubling the previous record of $9.4 billion in 2017, the report said.

"The high volume of flows in 2018 sends a clear signal that the commercial appetite for cross-border investment between our countries remains strong," NCUSCR President Stephen Orlins wrote in a foreword to the report.

"In China, American investors continued to utilize minority VC investments in 2018 to gain exposure to sectors including digital payments, internet startups and other digital content," it said.

As far as US foreign direct investment in China is concerned, the report said researchers have a "positive" near-term outlook.

"It should be noted that portfolio investment provides a new bright spot in the two-way investment relationship," Orlins said.

Charlie Munger, vice chairman of US multinational conglomerate Berkshire Hathaway Inc., said in an interview that he is "quite optimistic" about the Chinese economy.

Berkshire CEO Warren Buffett's business partner, Munger told Yahoo Finance that China has been "succeeding for a long time."

Munger said that China has "one of the greatest success records in the history of mankind," and what China has achieved economically is beyond his prediction.

"In the whole history of the world, no nation that big has ever advanced that fast," Munger said.

"We just have to make sure that competition (between the US and China) doesn't get us to a point where we don't realize that the best world is one in which both the US and China prosper," Buffett said in an earlier interview with Yahoo Finance.

Asked whether Berkshire Hathaway, the multinational conglomerate of which Buffett is chairman and CEO, would ever make a big acquisition in China, Buffett said, "The answer is we would."

In an exclusive interview with Xinhua in April, Gita Gopinath, chief economist of the International Monetary Fund (IMF), praised what the Chinese government has been doing to pivot away from high-speed growth to high-quality growth, noting that such a shift would require moving away from credit-driven, investment-driven growth toward more consumption-driven growth.

China has used a combination of monetary policy tools and fiscal stimulus, Gopinath said.

The interview with Gopinath was conducted on the sidelines of the Spring Meetings of the IMF and the World Bank, during which the IMF released its new World Economic Outlook (WEO) report.

The WEO revised up the 2019 growth projection for China to 6.3 percent, up 0.1 percentage point from its previous report in January.



Posted in: ECONOMY

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