Mark Mobius, who allocates capital all over the world, has raised a red flag about doing business – or trying to bow out of your business – with China.
"I'm personally affected because I have an account with HSBC in Shanghai. I can't get my money out. The government is restricting the flow of money out of the country," Mobius told FOX Business host Maria Bartiromo. "So I would be very, very careful investing in China."
On "Mornings with Maria" Thursday, the Mobius Capital Partners founder noted that China’s bottom line is moving "in a completely different direction" than its former open-minded-market revolutionary leader Deng Xiaoping.
"Now you have a government which is taking gold in shares in companies all over China. That means they're going to try to control all these companies," Mobius explained. "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."
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China has made a "very significant" effort to allegedly prevent Mobius from removing capital from Chinese-based stocks.
"I can't get an explanation of why they're doing this. It's just amazing. They're putting all kinds of barriers," the investor 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've made this money,' and so forth. It's crazy."
Mobius’ comments come as a recent survey on Chinese business sentiment from the American Chamber of Commerce revealed a majority of U.S. companies say China is no longer seen as a "top three investment priority."
The best investment alternative with the most economic opportunity, Mobius advised, is India.
"You've got a billion people, they can do the same thing that the Chinese do. They can do the same kind of manufacturing and so forth," he said. "I'm now in Brazil, and Brazil, you've got 250 million-plus people, very good people, open society. Hey, why not come here? It's another alternative."
In terms of America’s economy, Mobius said he doesn’t believe things will get worse amid rising tension with China.
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"I think the U.S. is in pretty good shape. And the reason why is that, let's face it, the U.S. is at war. They're at war in Ukraine and more and more at war with China indirectly. And when you have a war situation, spending goes up," Mobius said.
"That's the reason why you see the labor market being relatively tight in America. So I'm relatively bullish despite the interest rates. If you look at the history of interest rates, high interest rates don't necessarily mean a poor market," the investor added. "So I think the U.S. looks pretty good."
