Blackstone Group LP Chairman and Chief Executive Officer Stephen Schwarzman commented on the pace of growth in China and Japan’s steps to stimulate its economy. Schwarzman spoke in an interview Sunday in Beijing, where he announced a $100 million donation to set up a Rhodes Scholarships-like program at Tsinghua University.
On China’s economic growth:
“I think slowing growth in China from a 10 percent level should not be a surprise, as a country gets bigger it would become harder to grow at the same very rapid rates as when it was smaller. I don’t view that as anything unexpected or unusual. It’s still growing at an extremely rapid growth rate for a country of its size.”
“I think the first-quarter growth was slightly lower than what some people expected. I think the faster China grows the more global growth goes up just because it is the second largest economy in the world, also because it is the largest consumer of commodities in the world. So a few tenth of a percent of growth frankly is not really particularly material. I think there is probably too much emphasis that was placed on 7.7 percent instead of 7.9. I think you have to step back and have some perspective of that.”
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On transforming China’s economy:
“The Chinese have had pretty remarkable economic growth, a lot of it is based on infrastructure, growth in housing and lower than what one might hope for in consumer areas. Chinese have high level of savings for good reasons. They have to basically take care of their own retirement and health care but I think the future will be better served with a more robust consumer economy and less reliance on infrastructure simply because it’s more self sustaining. So that would be something that typically would happen with a country at this stage of development.”
On Japan and the yen:
“Japan’s basically been stuck in a virtually no growth economy since the 1990s and that’s over 20 years. They are embarking on a dramatically different approach. I just happened to have met a lot of people from Japan recently and they are extremely excited about their own economic prospects as a result of the changed monetary policy, so on the one hand there are financial consequences to increasing money in circulation by the very substantial amount that they are discussing.”
“On the other hand, that announced change had seemed to capture the imagination of the Japanese people which represents a major change in attitude which may amplify the success of that program. There’s no doubt that should result in an increasingly weak yen but that’s what they want to do.”
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