It has become de rigueur for any conference devoted to investment topics to feature at least one session on China. After all, China, with its 2 billion citizens, and the world’s fastest growing economy, would present plenty of opportunities, right? Wrong, or at least, maybe, said Ross Munro in a rather gloomy dissertation at this week’s 15th annual Global Investment Conference held at Mont Tremblant.
In fact, China’s march to becoming a “rich and powerful nation” may be causing a worsening climate for foreign investors. Munro cited evidence of increasing state controls and growing economic mercantilism. Pointing to unsustainable trade inequities and the Chinese Renminbi undervalued by as much as 40%, Munro warned of a coming fundamental clash with the United States.
Is he to be believed? Ross Munro has an impressive CV. He is the Director of Asian Studies at the Centre for Security Studies in Washington, D.C. He is best known as the co-author of The Coming Conflict with China, that was the first major book to argue that China has emerged as America’s most formidable rival. Closer to home he was once the Beijing correspondent for the Globe and Mail.
While Munro predicts that there will be minor changes to the valuation on the Renminbi, he reminded the audience that China’s $2.4 trillion of foreign exchange reserves are being used to advance Chinese state power.
Munro cited a host of recent developments, including the reversal of privatization, new regulations forcing foreign companies to turn over technology, and the increasing blocking of foreign investment. Also, he says, there is evidence of declining political freedom, less academic freedom and less freedom of the press.
For more information about Munro, visit his website.