China Is the Story of the Century

05/11/2011 9:00 am EST


Jim Rogers

Author, Street Smarts: Adventures on the Road and in the Markets

Jim Rogers, the legendary investor, recently came to The World MoneyShow Shanghai to give a groundbreaking keynote speech. In his talk, Rogers said that while the greatest opportunities for investors during this century will be in China, there will also be big risks.

Over the next two weeks, we will be running a series of articles excerpted and edited from Rogers’ speech to Chinese investors. The series provides Rogers’ unique insights into China’s economic growth, advice on how you can profit, and which Chinese sectors, specifically, you should keep an eye on.

When I speak in the West, I always tell people the most important thing happening in the 20th and 21st century is the rise of China.

In my view, the 19th century was the century of the UK, the 20th century was the century of the US, and the 21st century is going to be the century of China, whether we like it or not. Many people in the West do not like that—but there’s not much they can do about it.

China is the only country in the world that I know of which has had recurring periods of greatness. Great Britain was great once. Rome was great once. Egypt was great once. But China has been great three or four times.

China’s History of Setbacks
China has been terrible three or four times too. The country had some serious problems in its long history. For 300 years it was in decline, and then in 1978 Deng Xiaoping said China needed to try something new. He opened the gates again to entrepreneurship, and you know the rest of that story.

The reason I bring it up is because most people in China do not even understand the full significance and depth of what’s happening, much less the West. Chinese investors are at the right place at the right time.

China is going to be the great country of the 21st century, and you need to prepare yourselves for that because there are going to be amazing and startling opportunities in China, just as there were in the US and the UK as they rose to power and glory.

The US Was Once a Mess
I need to emphasize that there will be more setbacks along the way. In the United States, in the 19th century, we had:

  • a horrible civil war
  • fifteen depreciations
  • very few human rights
  • very little rule of law
  • even periodic massacres in the streets

We were a mess in the 19th century.

As recently as 1907, the whole United States system went bankrupt. Washington went bankrupt. New York went bankrupt. The place was a wreck, just on the verge of becoming the most successful country in the 20th century.

So, China is going to have setbacks. Be prepared for them. I don’t know what. I don’t know when, but I know that every country which rises, every company which rises, every individual which rises, has setbacks along the way.

China will too, but when you see setbacks, pick up the phone and get more invested, more involved, because China is going to be the great success of the 21st century. Again, whether the West likes it or not.

NEXT: Watch Out for Real Estate Prices, Inflation


Watch Out for Real Estate Prices, Inflation
The Chinese government is trying to slow down growth, and in my view, that’s the right thing to do because there is an inflation problem here. I hope that they can control it.

Another problem: Real-estate prices in some parts of China are too high. The Chinese government is trying to slow that down—correctly, in my view. I would not buy an apartment in Guangzhou. I would not buy an apartment in Hong Kong. I would not buy an apartment in some of the places that are very high in China.

But if and when prices come down, or if and when you can find good real estate in some of the interior cities, or some of the places around the coast, there are going to be great fortunes made.

There’s a giant historic change taking place. In the 1920s and 1930s the center of the world moved from the UK to the US, exacerbated by a financial crisis and mistakes that were made by politicians. The same historic shift is taking place now, exacerbated by a financial crisis and by mistakes made by politicians. The change this time, however, is from the United States to Asia.

The largest creditor nations in the world now are China, Korea, Japan, Hong Kong, Taiwan, and Singapore. You know where the money is, you know where the assets are, you also know who the debtors are, and you know where the debtors aren’t.

Learn Mandarin
So, we’re in the middle of a huge historic shift which is taking place. I would urge investors to capitalize on it. When I speak to people in the West, I explain to them the best advice I can give is to teach your children and your grandchildren Mandarin, because Chinese is going to be the most important language in the 21st century.

Both of my little girls speak Mandarin like natives. If you met my little girls and you could not see them, you would think that they were Chinese or that they had Chinese parents, because they speak better Chinese than many people in Asia. So I’m living this advice.

My wife and I sold our house in New York four years ago. We moved to Asia, because I think that the best skill that I can give to children born in 2003 and 2008 is to know Mandarin and to know Asia.

The reason I emphasize this to people in China is because they have to understand what’s happening here. Many people don’t. Some of the greatest opportunities in the 21st century are right here in China. They may not be in Shanghai—but go west, go north, go south, because there are gigantic opportunities.

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