Editor's note: James Beeland Rogers Jr. is a famed American venture investor and commentator who had his first job at age five, picking up bottles at baseball games. He has gone viral in China for supporting his children to learn Chinese and his love for Chinese wisdom.
When talking to ShanghaiEye, Rogers shared us with his understanding of the Chinese word "wei ji危机", meaning the co-existence of catastrophe and opportunity, to explain the crossroad that the global economy is now facing after a 3-year slowdown.
ShanghaiEye: You mentioned in the previous interview that China will be the most successful country of the 21st century. Could you elaborate more on this?
Jim Rogers: The 19th century was the century of the UK. The 20th century was the century of the US. In my view, the 21st century is going to be in the century of China. They are opening up that one billion four hundred million people there, they did not build up gigantic debt, like some countries, Japan, England, America, some countries.
And now those people, those Chinese, the billion four hundred million, are back. They're smart, they're energetic, they're ambitious, they work hard, they save their money. China is the only country in world history that's been on top three or four times. You know, Rome was great once. Egypt was great once. Britain was great once. China has been great three or four times in history, they are the only country that after being at the bottom for a while, has turned around after a few decades or centuries and risen to the top again. It's happening again.
ShanghaiEye: Major institutions raised China's economic growth forecast after its optimization of COVID response. So will China's economy usher a large rebound in 2023?
Jim Rogers: The reopening of China again is going to make a huge difference. It's going to cause more demand, bring more products to the markets, to world trade. It's going to help a lot.
ShanghaiEye: China these days also have its own challenges.
Jim Rogers: Oh, everybody has problems as they rise and China will, too. Don't worry. But when you see problems in China, remember the mandarin word, "wei ji危机". We don't have that word in English, but you know how the Chinese know, because they've been around for centuries, that catastrophe and opportunity are the same thing.
ShanghaiEye: Major institutions vary in terms of expectations for this year's economic growth. For example, UN's forecast is 1.9% while the IMF predicts 2.9%. So what is your take on this? And more importantly, what are the major driving forces or hurdles for the global recovery this year?
Jim Rogers: My view is, you know, we had serious problems. We had a huge boom. Inflation got out of control. When we had the virus, they closed down a lot of places. Now the virus is not completely passed, but it's getting better. And people are opening up. Inflation calmed down a little bit.
So I would suspect that for a while, especially since China is opening up again, and China is the second largest economy in the world, these things will be better for a while. Many people say we will have a recession and we will. But I suspect it will not happen this week or this month. (It) will happened later, probably later this year or next year, but it's coming, but not right away.
ShanghaiEye: You warned actually that most of the world's economy would experience severe difficulty in 2023, a multi-year recession could last three or even four years. Do you expect a US recession this year or the coming years or a soft landing, soft-ish landing, hard landing, or no landing, what's your take?
Jim Rogers: Governments talk about a soft landing, but (there) have never been a soft landing. No central bank, no government has ever been able to achieve a soft landing. So don't worry, it's gonna be harder. And I would suspect it's gonna be the hardest in my lifetime, and I'm older than you. You know, we had this big problem in 2008 because of too much debt.
But why, look out the window, since then, the debt has skyrocketed everywhere. We have the highest debts we've had in the history of the world. So the next time we have a problem, it has to be very, very bad.
ShanghaiEye: In the face of such severe challenges, China has always emphasized the need to adhere to openness, cooperation and multilateralism. So how important is it?
Jim Rogers: Well, extremely important. So as I said, China is the second largest economy in the world. If China continues to open up, that's a billion four hundred million more people in the world economy, that they're buying and selling, they're spending, they’re building, they're consuming.
We certainly need China to continue to open up to the world.
ShanghaiEye: In the context of intensified geopolitical and ideological tensions, globalization is facing increasing resistance these years. To what extent are you worried about the trend to continue or even intensify in 2023? And how will it affect economic growth this year?
Jim Rogers: Well, I hope you're very worried. I certainly am. Throughout history, when people have economic, you know, problems with each other - they don't have to - but when politicians don't know what to do, they blame foreigners and that makes it worse, of course.
Whether the problems are Washington or Beijing - and in this case, there are more Washington than any place else - but now we don't have to have them. But we always have, because somebody, you know, whenever there're problems and people start blaming foreigners. They don't blame themselves. No politician anywhere in history said, you know, this is my fault, I'm sorry. No, they say it's those foreigners, see those people with different hair and different eyes and different language, those are the - different food, different clothes.
Those are the problems. That always happens, and it is happening. Washington, anyway, is doing it a bit more now. I wish they would not do it, but they think that's the way they get elected. China and America for the past 40 years had great prosperity and progress together. It could happen that way again, if people just stay calm and work together instead of shouting at each other.
ShanghaiEye: You are among the first batch of foreigners to invest in Chinese stock market. So as an international investor, which industries have you paid more attention in recent years?
Jim Rogers: Remember, "wei ji危机"? (Yes.) Okay, windows, problems.
We had a big virus recently, but many industries got hurt badly. Travel, tourism, entertainment, restaurants, things like that, got hurt badly. So those are the areas where I have been looking. I remember "wei ji危机", I have learned my Chinese history. I have learned a little mandarin, look at agriculture and look at the things that have been hurt the most.
ShanghaiEye: And how do you evaluate the opening up and internationalization process of China's capital market in recent years?
Jim Rogers: Remember Deng Xiaoping? He said, I don't care if it's a black cat or a white cat as long as it catches mice. And he let people start catching a lot of mice. China has been the most successful country in the world in the last 40 years. It could happen more. If I were in charge, I would make it even more. I would open China more and more every week, every day.
You don't remember China before. I do. It's a miracle, what has happened. More people have been lifted out of poverty in China in the past 45 years than ever in the history of the world. It’s been a fantastic miracle. It has been doing well, but that doesn't really can't have problems. There will be problems along the way. But when you see problems, remember "wei ji危机".
ShanghaiEye: As the global fiat currency, the US dollar has fluctuated significantly as a result of Federal Reserves' aggressive interest rate hikes. And the spillover effect leads to another round of discussion on the need of a multipolar or bipolar system of currencies.
Jim Rogers: The world has always had an international currency, international medium of exchange. Before the US dollar in this century, it was the British pound. It's happened many times. No international currency has lasted on top more than 150 years. Dollar is coming to the end of its run. America is now the largest debtor nation in the history of the world, and the debts are getting worse and worse.
So for fundamental reasons, people looking for something to compete with the dollar, and also for political reasons, people are looking for something to compete. The international currency is supposed to be neutral, can use it for anything in the world. But now if Washington gets angry, actually, they cut you off. People start to say, even friends of America start to say, wait a minute wait a minute, that's not the way it's supposed to work. So now everybody is looking for a new currency to be the international currency. I don't know what it will be yet. It's not gonna happen this month, but it will certainly happen in a few years, next few years.