New | Fortune to be made in cleaning up China, says investment guru Rogers

Railroads, health care, tourism, defence and cleaning up China’ s dirty environment are where investors need to be if they want to make money from the country’s future growth, investment guru and long-term China optimist Jim Rogers said on Monday.

Hong Kong would also need to adjust its exposure to China, most notably by jettisoning its own currency and adopting the yuan once mainland currency exchange controls end, Rogers added, or else the city risked being marginalised in its historical role as a middleman between the world and China.

In a wide-ranging speech at a forum in Hong Kong, the veteran money manager warned the central government against interfering in the stock market or supporting otherwise bankrupt companies, saying the country risked repeating Japan’s mistakes. One result might be “zombie banks” which had crippled Japan’s growth for more than two decades, he said.

“Its much better to let markets hit bottom and then let markets start over,” the Singapore-based Rogers told the Bloomberg Businessweek forum.

Mainland stock markets crashed more than 40 per cent from June through to mid September prompting a series of hurried government measures including the creation of several bailout funds, and a crackdown on short selling and share trading manipulation that’s swept up dozens of top finance executives in various probes.

Beijing’s response “does make me nervous about investments” Rogers said, but that had not altered his long-term belief that this would be China’s century.