Wednesday, September 29, 2010

David Rubenstein on China, Oligarchs and Gold

The final panel at the Dow Jones Private Equity Conference included Carlyle Group co-founder David Rubenstein.

Most of the questions by the moderator were directed at Rubenstien and he provided a long string of reasons why he thought China was the best place in the world to invest.

He likened the present state of China to the United States in 1910.

He said there were three types of Chinese companies to invest in:

Embryonic companies that are providing services for domestic Chinese consumers.

Larger companies that focus on the export market.

State owned companies that are in the process of privatizing.

He indicated that all three types made good investments.

His enthusiasm for China did not stop there. He said that China encouraged Private Equity investments more so than any other country, including the U.S.

"I feel more welcome there than in the halls of Congress," he said.

He said China will be the largest economy in the world by 2035.  India will be second, the U.S. third  and Brazil fourth.

Interestingly, he bitched about Russia and said that no one made money there except Russians. He said it was a natural resource economy controlled by the oligarchs. In the U.S., of course, many have labeled Rubenstein an oligarch, where Carlyle Group has close relationships with the government, and at various times George H.W. Bush, George W. Bush, James Baker and Frank Carlucci, among others have advised the firm.

Rubenstein closed the panel discussion, and the conference, by telling a Russian joke:

Former Russian President Mikahail Gorbachev spoke at the Kennedy Center in Washington D.C. After the speech, he was asked a question, "How would the world be different today, if Kruschev had been assassinated in 1963, instead of Kennedy. Gorbachev answered, "I couldn't tell what the differences would be except for one thing. Aristotle Onasis wouldn't have married Mrs. Kruschev."
After the conference, I caught up with Rubenstein to ask him about gold. He gave me the Jim Chanos answer: He is not an expert on it and doesn't have an opinion.

1 comment:

  1. "He likened the present state of China to the United States in 1910."

    Apparently Rubenstein does not consider the rule-of-law, human rights, free trade, etc. to have been instrumental to the progress the U.S. has made since 1910.

    It's really pathetic so-called capitalists have no idea what-so-ever about the foundations of Capitalism.