Billionaire investor Mark Mobius told Fox Business that he can’t get his money out of China owing to capital controls, warning investors to be “very, very careful” about investing in a government-controlled economy.
“I have an account with HSBC in Shanghai,” Mobius, founder of Mobius Capital Partners, told Fox Business in an interview published on March 2. “I can’t take my money out. The government is restricting flow of money out of the country.”
Mobius’ remarks were widely disseminated on the Chinese social media platform WeChat over the weekend, coinciding with China’s Two Sessions annual legislature meetings, which disclose the country’s policies for the future year.
“I can’t get an explanation of why they’re doing this … They’re putting all kinds of barriers,” Mobius said. “They don’t say, ‘no, you can’t get your money out’. But they say, ‘give us all the records from 20 years of how you made this money’ … This is crazy.”
Mobius led emerging market investment at Franklin Templeton Investments for three decades and is known for his bullish views on China. Now, though, he said, he “would be very, very careful” investing in the country.
“The bottom line is that China is moving in a completely different direction than what Deng Xiaoping instituted when they started the big reform programme,” he said, referring to the former Chinese leader.
“Now you have a government which is taking golden shares in companies all over China. That means they’re going to try to control all of these companies … So I don’t think it’s a very good picture when you see the government becoming more and more control-oriented in the economy.”
Mobius, who calls himself “the Indiana Jones of emerging market investing”, told Fox Business he is increasing exposure to alternative markets such as India and Brazil.
Mobius and HSBC could not be reached at the weekend.
Mobius, 86, is renowned as the “Father of Emerging Markets” since he has spent over 30 years investing in emerging nations. They typically have higher volatility but also higher returns than developed markets. Mobius was among the first to invest in rising economies in Asia, particularly in mainland China.
He co-founded Mobius Capital Partners with two other veteran managers, Carlos Hardenberg and Greg Konieczny, just a few months after standing down as chairman of Templeton Emerging Markets Group in January 2018.
The two sessions are where China’s two main political bodies, the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), reveal plans for China’s policies in the economy, military, trade, diplomacy, the environment, and other areas. The event began on Sunday with Premier Li Keqiang reading the most recent government work report under his supervision. By the completion of the legislative session, he is anticipated to be followed by Li Qiang.