Australia set to benefit from surprising China growth, says Wien
The outlook for Australia is good as it is set to take advantage of China's surprising growth, according to Blackstone Advisory Partners' vice-chairperson, Byron Wien.
Wien, considered to be one of the most influential people on Wall Street, was discussing the establishment of a Blackstone Group office in Australia later in the year.
"I've always had special enthusiasm about Australia because for a long time I've been very bullish on China," he said.
Last year Wien predicted that China would continue to grow at a rate of seven to 10 per cent, even though Europe and the US were in recession.
"And China proved that it could do that; that its economy could decouple from the recession that's been experienced," he said. "China has an independent economy able to serve both itself and other countries in Asia and take advantage of opportunity."
Wien asserted that China was not simply a supplier to Western consumption.
Considering the growth of the world economy of 4 per cent, he noted that 2.5 percentage points would come from emerging markets.
He added that despite the economic problems in Europe, China's early investment in its infrastructure had stood it in good stead and contributed to building up personal consumption that would enable the country to grow without being dependent to such a high degree on exports.
"There's been a migration of economic power from the West to the East by about one percentage point a year. I think that's going to continue, and I think Australia will be a beneficiary," Wien said.
Wien added that he remained bullish towards China, despite recent restrictive measures aimed at curbing speculative real estate activity at the high end of the market.
"There clearly are events up there that the Government wants to control. But the basic economy of China is surprising us favourably."
Wien said the Government had a specific aim in tightening money and he felt it would be successful in doing so.
"As far as the overall economy is concerned, I still think it's going to grow in high single digits," he said.
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