Charlie Rose Talks to Gao Xiqing

As the global economy struggles to recover, China has taken on a position of greater strength. But is China slowing down?
Well, by the numbers, of course, it’s sort of slowing down, which I’m quite happy with because for a while the economy was growing a little too fast. And because of that we have the pollution, and we have the overheating, and real estate is another big thing. But over the past two or three years, the government has been trying very hard to slow down the economy to some extent.
China’s sovereign wealth fund was created to help diversify your nation’s investments. What kinds of things are attractive to you now?
First of all, the global economy overall is not in good shape right now because of a lot of problems, not just short-term ones. At the same time, you can see the emerging markets still going strong in many places. And some of the larger countries, the BRIC countries with so many people, always have a huge base for domestic consumption. Our governments, Chinese and Brazilians and Indians and South Africans, we’re all encouraging our people to consume more. So because of that our economy is still going forward. We see fine opportunities. It’s just a little harder.
You and I both participated in a conference where they addressed Europe’s problems and how China might lend a helping hand.
That’s a question people come to me and ask. Of course, we are all interconnected. So in a way, potentially, we’re helping each other. The problem is that you can’t really expect China to be the savior of the West because, you know, we have our problems. We have trillions of dollars that people see as some huge trough with which to help. It’s just very concerning. It’s really not the money of the government. It’s just a balance sheet problem. So we will try to help to the extent we can. But really, we have to watch the bottom line.
Coca-Cola’s been doing very well in China. Its CEO, Muhtar Kent, said in a speech recently that it’s often easier to do business in China than in the U.S. Do you think that’s true?
In many ways, it should be true because we have all these people. I know a lot of real estate people and manufacturing people who say, well, it’s not easier. [But] in this country, the regulations require that workers can only work a few hours a day. In China, we do have a law, but very few people really take heed of the law, so workers really work much longer hours. So it’s a lot easier to get things done. That’s true. Whether or not it’s a good thing, I don’t know. Eventually that encroaches upon the health of the workers, and they have other problems. But the thing is, in today’s world, if you are in a competitive mode, and if you are the one to be successful, country vs. country, then that’s the way things seem to be done.
When companies consider investing in China, they have to ask themselves about copyright protection, access to the market. Is the playing field level today?
You have to put this in historical perspective. If you compare China today with the Western world, with the U.S., you get very many things that we have to improve on. There are many things that we have not done to a perfect extent. But at the same time if you look at China today, compared to China, say 20 years ago, 30 years ago, we’ve made a tremendous amount of progress. I personally have many friends in the Internet field, so of course [intellectual property rights are] dear to my heart. If you look at how the whole business model is changing, in fact, there probably will no longer be a problem in a few years’ time.
Before 2008 it was often said that China looked to the U.S. as a model in many respects. Has this attitude now changed?
I’ve been back in China [after college in the U.S.] for the past 23 years. For the first 10 years, I always found myself on the defending side of the American system, always trying to explain to my countrymen that this is how their system works and this is why their system is superior in many ways. Now I find it more and more difficult to do, especially after a lot of changes not only in the economic field, in the regulatory field, but also in the political field. People started to think, “Well, maybe, [this is] the reason why our system has been here for over 2,500 years.” … Somehow, your system has come to some sort of a dead end, at least for now. You need to rethink about the system.


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