What is going to prompt the average Chinese person to spend more money?
Zheng: [If] we look at overall regional sales or consumption growth, in fact, it is not strong by China standards. The reason is because you have a social welfare system still in transition. You have education costs rising very rapidly. So households need to save, save for old age care, for kids’ education, for possible job losses, all those. So I think this will take at least another three years for this marginal propensity to consume to rise again, so that will be the time for us to see more consumption. Q. What are the perils of investing in China? What about management, corporate governance and the banking sector? Mobius: There is a lack of global knowledge in particular fields. Not enough managers in China who are capable of understanding what is happening globally, so you have to find people who understand these concepts. Also, they haven’t had the experience of working in profit making enterprises, so the inefficiencies are very, very high, and that is the pool of management we
