The manufacturing revolution occurring in the US will make it the most important country in the 21st century, argues Ronnie Chan, chairman of Hong Kong property developer Hang Lung Group.
Chan, speaking at the Julius Baer Next Generation Summit 2013 in Bali last week, dismissed the idea that China will be the leading nation.
“China is more important now [than in the past] – it can’t be ignored. But the world of tomorrow will not be centred on China,” Chan told the audience. “Nobody can do anything in the world without the United States. It will still be the ‘US century’.”
Chan implores both nations to put aside their differences and work together, noting that their often-tumultuous relationship ultimately causes problems for the rest of the world.
While a ‘G2’-style relationship between the US and China has its critics, he argues that such an alliance is vital to solving many global problems. “When the US and China collaborate, the world is a better place.
“But the US is unfortunately mistreating China today,” says Chan. “I fear America is bent on making China into an enemy. That worries me.”
As for the future of the US, he believes the energy revaluation that is occurring now will turn the country back into one of the world’s manufacturing centres. Shale discoveries will help it become a cheap producer of natural gas, most of which will be consumed internally as opposed to exported.
Yet it’s not just shale gas discoveries that will make America stand out. “The primary [driver] is technology,” Chan said. Advances in robotics will further catapult the US into a manufacturing-driven economy within the next few decades.
That said, Paul Krugman, renowned economist and Nobel Prize winner, said at the same forum that this latest manufacturing revolution will not create many new jobs.
“Manufacturing will come back to the US, [making it] a more balanced economy,” he argued. “But it’s not going to be a major source of job creation. That’s the important thing to remember.”
In the 1950s and 1960s, manufacturing jobs made up some 35% of the workforce in the US. Looking ahead, 35% is a pipedream, Krugman said, and even 15% is very unlikely.
Chan agrees, later telling AsianInvestor that humans will ultimately be replaced by robots in the manufacturing sector.
“My Mexican friends are all worried about China. I tell them it’s the wrong country to worry about – they should worry about the US,” he said, referencing the loss of jobs he expects to see in manufacturing.
China's long-term story remains positive, says Chan, but he expects the next five years to be difficult as the country seeks to shift from an export-driven model to a consumer-driven one.
Still, the country offers a chance for “dummies like me” to make money, he adds. “I let my smart American friends make money [for me] in the US. I invest myself in China.”
Former Israeli prime minister Ehud Barak also offered some investment advice to attendees: avoid Syria.