by Niko Kloeten
Jonathan Wu, associate director of Premium China Funds Management, will be speaking at tomorrow’s Perfecting Investment Portfolios event in Auckland.
He will be talking about what to expect from the world’s second-largest economy, and how to best take advantage of the investment opportunities it presents.
One of the key themes, Wu told Good Returns, will be how China is aging but not doing so in the same way as Western countries.
For instance, he said China’s baby boom didn’t happen after World War II but about 15 years later during the cultural revolution: “By the time China enters the worst point in its demographics the rest of the world will be already stuffed.”
Wu also noted that the traditional lack of a social safety net means over-65s in China won’t be as much of a burden on their fellow citizens as their Western counterparts.
But he said the key difference between China and the West is that while Western countries have got rich before they’ve got old, China’s is still relatively poor and is undergoing a switch towards consumption as incomes rise.
This shift, he said, would see demand for minerals reduce while demand for soft commodities such as milk will increase.
Asked if it would favour New Zealand over Australia, he said, “Definitely; you guys have done one thing that is very smart and that is you’ve created an export that is sustainable."
“I’ve been preaching to Australia that we need to consider we have more arable land than New Zealand seems to be taking of this situation exponentially better than what we are doing in this space. Once the resource boom is finished, where will Australia sit in terms of its export base?”
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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