Ahead of the Curve: Carlyle Group Setting Sights on China, Says David M. Rubenstein

The Wall Street Journal ViewPoints Executive Breakfast Series

19/03/2010

The Carlyle Group is continuing to step up investments in China, keeping pace with the country's projected growth over the next few decades, said David M. Rubenstein, managing director of the investment firm.

"We're the largest private equity investor in China," said Rubenstein, in an interview this week as part of The Wall Street Journal ViewPoints Executive Breakfast Series, co-sponsored by IESE Business School and BCG.

The Carlyle Group has 45 Chinese professionals working in the country, which has had the biggest economy in the world for 15 of the last 18 centuries, he said. 

"China is regaining its position as a dominant economy in the world," Rubenstein said, in the interview conducted by WSJ Deputy Editor Alan Murray.

The U.S. will continue to be the largest economy on the planet until about 2035, when China will surpass it, he said. The Asian giant's domestic market is now 70 percent export-oriented, and 30 percent consumer-oriented, a ratio that will shift to 50/50 in the future, he said.

"We can't invest enough money in China, in our view," he said.

Following World War II, the U.S. represented 48 percent of the world's GDP, a percentage that has now diminished to 21 percent. As a global firm, he said, the Carlyle Group has to follow shifts in worldwide GDP.

When Murray asked whether China's communist system of government was a concern, Rubenstein countered that business decisions cannot be made solely on political principles. Moreover, every country has its problems, including the U.S.

Most importantly, China's culture is not going to change "overnight."

"I think it has been good for China to have Americans invest there," he said. "I think it's been good to have Chinese educated in the U.S. and the flow of cultural exchange has been good."