Mark Mobius Sees Little Chance of Global Recession, Still Likes China

November 8, 2012 12:43 PM EST Send to a Friend
Mark Mobius thinks a crash in China is overrated.

The opinion from the overseer of $45 billion in assets at Franklin-Templeton isn't new; Mobius has been betting on China for a while now. Overall, he thinks that growth in China isn't likely to reach the double-digit figures once seen, now that the economy is the second largest in the world. He's comfortable with growth in the high-single-digit range, something along the lines of 7 percent to 8 percent, which are numbers that are still leagues above global expectations of maybe a 1 percent growth rate.

Mobius spoke with Bloomberg recently, offering more insight into the global economy. He thinks another recession isn't in the works. In fact, he sees the world economy in recovery mode, particularly in the U.S. and Japan, even China to some extent. He also believes that China's leaders will be able to engineer a "soft" landing, not a crash like what has been seen in other global markets.

His words echo the opposite sentiment of noted short-sell Jim Chanos, of Kynikos Associates Ltd. Earlier in November, Chanos commented after banks in China had one of their best months ever, rising about 8 percent in October on sentiment that new leadership would spark change in the economy.

Chanos, who has been shorting Chinese banks since February 2010, succinctly said the region is just beginning to deleverage financial institutions, much like the U.S. and U.K. in 2009 - 10.

U.S. markets have turned lower Thursday afternoon, after starting off the session in positive territory. The S&P 500 is down about 4 points, or 0.3 percent.


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