'I’ m optimistic about Chinese stock market recovery': Rogers
Published: Feb 01, 2024 07:49 PM
Economists' VIEW logo

Economists' VIEW logo

A view of the skyline of Lujiazui in Shanghai on January 24, 2024 Photo: VCG

A view of the skyline of Lujiazui in Shanghai on January 24, 2024 Photo: VCG

Editor's Note:
Contrary to sensational headlines in Western media outlets suggesting international investors are abandoning Chinese stocks and redirecting investment toward Japan and India due to recent volatility in the Chinese stock market, investors are actually showing renewed interest in Chinese stocks. Last week, Chinese stock funds experienced the highest inflows in nearly nine years, amounting to $12 billion, as reported by The Wall Street Journal on Tuesday, citing data from Deutsche Bank. 

What is the confidence level of international investors in the Chinese stock market? How do they view China's economic prospects? The Global Times (GT) invited renowned international investor Jim Rogers (Rogers) to discuss China's economic prospects and stock market.

GT: How do you view the recent volatility in China's stock market?

Rogers: China has faced two significant challenges in the past two to three years: dealing with COVID-19 and the readjustment in the property sector. These events have had a profound impact on the country. 

It is natural for the stock market to drop in such circumstances. Therefore, the decline in the stock market is to be expected. In my opinion, both the epidemic and the property sector's readjustment were massive events that had a major impact on China.

I would suspect that we're getting near the bottom if we're not already there, because when a government takes strong measures, it usually helps the market, whether it's China or another country. Governments have a lot of money and a lot of influence. They can certainly help change things, at least for a while. If they see problems, I think they will do more to help.

GT: Have you made any moves in the Chinese market?

Rogers: I am seeking new investment opportunities in China. Although I haven't made any recent investments due to the lack of suitable options, I am actively searching for potential investments. I suppose that if stock prices were to rise at the moment, I might not come across many investment opportunities. But I'm looking.

GT: There have been many negative reports in Western media about China's stock market. Some suggest that investors are opting for the Indian or Japanese markets instead of investing in Chinese stocks. What is your perspective on that?

Rogers: The Japanese market has been going up for the first time in 35 years, indicating that there are buyers in Japan, whether they are foreign investors or not. I am uncertain about the extent of foreign investment, but it is evident that some investors are putting money into Japan because of things that are happening in the country. Likewise in India.

I am not moving my money from China to Japan or India, but maybe some people are. I like to see things like journalists writing about the end of investing in a country. That usually means the market has hit bottom. When people give up on the market, it usually is at the bottom. So that's a good sign for China, if you ask me.

I cannot speak for others, but personally, I prefer investing in China. I recently sold my Japanese shares, because they had gone up so much. While Japan's market is on the rise and China's market is experiencing a decline, I would rather allocate my funds in China. I am actively seeking new stocks and investment opportunities in the Chinese market.

GT: You have previously stated that you would hold Chinese stocks for the long term. Has your attitude toward the Chinese stock market changed? 

Rogers: I have not sold anything in China. I am looking for new investments in China. I hope that my children someday wake up and say, boy, I am so glad my father bought us all these Chinese shares.

GT: How do you evaluate China's 5.2 percent economic growth in 2023 and the economic prospects in 2024? 

Rogers: Journalists like to be negative. Negative news usually sells, regardless of the country. People are interested in reading negative news, especially since China has been such a great success for so long. Journalists think they can get readers that way. In my experience, when journalists write negative articles about a country, it's usually a sign to buy.

The Chinese economy got hit badly by the property readjustment and COVID-19. So China got hit badly by two very powerful forces. I would suspect that we're hitting bottom. I don't know if today is the bottom, but we're near. 

What often happens when a market hits bottom? It tends to bounce along the bottom for a while before turning up. It seems to me that China is hitting bottom. We're going to bump along the bottom for a while and then turn up. The more bad news that comes out, the better it is.

GT: Are you optimistic about a recovery in the Chinese stock market and the economy?

Rogers: Absolutely. But I want to emphasize that nothing goes straight up or down. Yes, the US became the most successful country in the 20th century. We had some terrible times, some terrible stock markets in those 100 years. 

It is normal that bad times come, so be prepared for bad times. But there's a term in putonghua called wei ji, which means that disaster and opportunity are the same thing. So if you see bad news, remember wei ji.

If you delve into the meaning of wei ji, you will understand what I am referring to. One of the sectors that have been severely affected is tourism. These sectors are where my focus lies. I prefer to seek out opportunities that are inexpensive.

I am also following emerging sectors such as electric vehicles a little bit, but I don't like to invest in things that are popular. EVs are very popular in many countries.

GT: The US has been implementing restrictive measures to curb China's technological advance. Do you have confidence in the Chinese tech sector?

Rogers: I have a great deal of confidence in the Chinese tech sector. China produces thousands of engineers every year. Some of them are very good. If you look at the Chinese economy, you can see that there were some great engineers and some great technology. So I know that there is going to be more technology and more technological advances in China.