Billionaire Charlie Munger praises China for being smarter than America at handling economic booms

[billwanhua]

Billionaire Charlie Munger praises China for being smarter than America at handling economic booms

Billionaire Charlie Munger is a big fan of how communist China manages its economy.

www.cnn.com

China "steps on a boom in the middle of it instead of waiting for the big bust,"

Munger said: "Of course I prefer the conditions in the United States."

"It's true that I prefer my own system," he said, "but considering the problems China had I would argue their system has worked better for them than ours is for us."

"I don't think we should assume that every other nation in the world, no matter what the problems are, should have our type of government," Munger said. "I think that's pompous and self-centered. Ours is right for us but maybe theirs is right for them."

"It is one of the most remarkable achievements in the history of the human race, what the Chinese have accomplished in the last 30 years," Munger said, echoing comments he made during Berkshire's annual shareholder meeting in early May.

 

[贾和平]

Billionaire Charlie Munger praises China for being smarter than America at handling economic booms

Billionaire Charlie Munger is a big fan of how communist China manages its economy.

www.cnn.com

China "steps on a boom in the middle of it instead of waiting for the big bust,"

Munger said: "Of course I prefer the conditions in the United States."

"It's true that I prefer my own system," he said, "but considering the problems China had I would argue their system has worked better for them than ours is for us."

"I don't think we should assume that every other nation in the world, no matter what the problems are, should have our type of government," Munger said. "I think that's pompous and self-centered. Ours is right for us but maybe theirs is right for them."

"It is one of the most remarkable achievements in the history of the human race, what the Chinese have accomplished in the last 30 years," Munger said, echoing comments he made during Berkshire's annual shareholder meeting in early May.

Cited from the last 2 paragraphs:
Munger drew criticism over the summer after praising the Chinese government for silencing Alibaba's (BABA) Jack Ma and saying he wished US financial regulators were more like those in China. "Communists did the right thing," Munger told CNBC in a special that aired in June.

The Berkshire Hathaway executive insists he does not regret those comments. "Regret it? I would regret not making them," Munger told CNN.

Michael Pettis, Finance Professor, Peking University, and Senior Fellow, Carnegie-Tsinghua Cente, comments on Charlie Munger remarks on China :

"According to Charlie Munger, China "steps on a boom in the middle of it instead of waiting for the big bust.

"It is hard to argue that Beijing has stepped in early to crush the bubble – even assuming that this time is real and they will not quickly ease off in the next few weeks and months.

"Chinese real estate may have already been in a bubble at the time of the 2008 Olympics, and certainly Chinese regulators have worried about this for several years, but didn't know how to resolve it without causing more short-term damage than they found politically acceptable.

"Since then, prices adjusted for income soared to 2-3 times US property prices, perhaps higher than any major property bubble since 1980s Japan. What's more, the property share of household wealth, at roughly 80%, is probably higher than in any other housing bubble in history.

"All of this suggests that we are pretty far from the middle of the boom. I assume for people like Charlie Munger, foreign real estate prices only became a problem around the time that mainstream American newspapers first write about it."

Don't draw a simple and political conclusion right now. Wait and see what the outcome will be in 3 to 5 years, that will make economic sense.