Geoff Lewis, Hong Kong-based head of investment services at JP Morgan Asset Management, comments on China’s effort to become a more consumption-driven economy and the potential of shale gas.
He made the comments today to reporters in Singapore:
“China we believe has made some reasonable progress toward shifting its economy away from dependence on investment. In the first half of 2011, consumption accounted for 48 percent of GDP growth. That is up from 37 percent in the calendar of 2010.
“China knows it is in its own best interest to move away from export dependence at a relatively rapid rate.
“They are doing more to remove their share of global imbalances than you might say the U.S. administration with all their checks and balances are achieving on the other side of the Pacific.
“We think that it would be wrong to bet against Beijing at this point.”
On shale gas as an alternative energy:
“Longer term, I think shale gas is going to offer an alternative to oil for auto transport and heating purposes. There is as much shale gas in Europe and there’s a ton of it in Poland and it is a big changer.
“It is going to reduce OPEC’s monopoly strength. It’s going to reduce Russia’s bargaining power and it’s going to be a lesson to smaller economies like Morocco, where you shouldn’t put all your eggs into one basket as it depends 98 percent of its exports on liquefied natural gas in Europe.”