“Be very, very careful about investing in China,” warns Mark Mobius
Since China’s borders have reopened and the country has emerged from lockdowns, there are myriad investment opportunities, including in baijiu companies. However, the founder of Mobius Capital Partners has issued a stark warning after struggling to “get his money out of the country”.
In an interview with Fox Business last week, US investor Mark Mobius revealed that despite being a longtime supporter of Chinese equities he will be steering clear for the foreseeable future.
Mobius, who is known for his bullish position on China, revealed that he had funds trapped in an account with HSBC Shanghai, saying: “I can’t get my money out. The government is restricting the flow of money out of the country.”
He added that for reasons unknown to him China is putting “all kinds of barriers” in his way.
“They don’t say: ‘No, you can’t get your money out.’ But they say: ‘give us all the records from 20 years of how you made this money’ … This is crazy,” Mobius added.
He said he would now be “very, very careful about investing in the country.”
“Now you have a government which is taking golden shares in companies all over China. That means they’re going to try to control all of these companies … So I don’t think it’s a very good picture when you see the government becoming more and more control-oriented in the economy,” Mobius said.
Last month db revealed that you can now invest in baijiu shares via an EFT (Exchange Traded Fund) launched on the Hong Kong stock market, with shares of baijiu groups growing in value rapidly over the past seven years.
Many drinks giants are also betting big on China, with Budweiser recently announcing plans to expand into more Chinese cities with its “super premium” beer brands.
Mobius’ comments may cause potential investors in the Chinese market to stop and think before tying up any funds there.
Meanwhile, Professor Sumit Agarwal of the National University of Singapore, has singled out Singapore as being a ‘safe haven’ for investors thanks to its political stability, trusted systems and transparency.
2021 saw a record US$296 billion in private equity investments in the Asia-Pacific region.