China Must Change Its Economic Structure: Miller

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April 16 (Bloomberg) -- Leland Miller, president at China Beige Book International, and Bill Janeway, senior advisor at Warburg Pincus, examine the strength of China’s economy as growth slows to 7.4 percent and the factors that may impede future growth on Bloomberg Television’s “Bloomberg Surveillance.”

You read between the lines.

What are the next two years going to look like in china?

We try not to go too far ahead.

Whether the government reforms, restructures, do some of the things that they promised to do, that will dig taped -- that will did take -- dictate . it is not the baseline scenario.

People need to understand the contagion's. these are not likely and shayna -- in china.

This is not something that will create one domino after the other.

They are at the end of the rope as far as dealing with misallocation.

You have said manufacturing is no longer the bellwether for china.

Retail and services.

What you want to see is retail and services strong, manufacturing, not the growth driver.

It is not what you saw in q1. the q1 performance that people are starting to cheer is not something you should cheer about.

The numbers in the china beige book shows a rise in manufacturing.

Industrial production, people have long relied on this as an indicator of the economy.

It is not a reflection or microcosm of china as a whole.

It is performing countercyclical before the past years.

You never know what is right or what is wrong.

The reality is that you have a situation where you never know what data is right or wrong.

We are lovely -- lucky to have leland miller here.

Bill janeway, we feared china.

Do they have a technology that we should fear them?

Marian ayn -- they are in an interesting place.

They are racing to the technological frontier.

It took the u.s. a hundred years, germany, 70 years.

It took japan a hundred years punctuated by world war ii.

When you get to the frontier, what has worked as a follower, that is protecting -- appropriating intellectual property, following the others, and then leaving.

-- leading do you see any of that with the new regime in china?

Sure.

What is in the growth in services sector.

There's a push away from the manufacturer model to more service.

Clicks -- from your book, the state has served as an enabler some time as the engine of economic development.

That is china.

Is china the one that is doing right?

Eight -- it shifts from copying well to creating new.

There is a great story that is totally forgotten.

At&t, the engine of american economic realm and in the 20th century.

In the 19 60's and 1970's, at&t did everything it could to block the internet.

They said the technology would not work, it is insecure, and will attack our monopoly profits.

China has that problem now.

Leland miller, the china beige book, thank you for being

This text has been automatically generated. It may not be 100% accurate.

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