A private investor, mainly active in china since 2010, David Baverez made a name for himself as a portfolio manager at fidelity investments in London and Boston. He then went on to found KDA capital. He has written several books illustrating the near-tectonic changes in the relationships between Europe, china and the United States. Criticizing the reluctance of the European Union, he encourages investors to turn to the middle kingdom to guarantee the future of the old continent.
In your books, you describe an innovative and productive China. How do you explain the different image portrayed by the Western media?
When I lived in the USA I saw the positive preconceptions that Europeans have of this country, with doubts and disappointments only coming when you go deeper into the inner states. It is an opposite process for China. Most start from a position of negative prejudice, but after digging deeper and meeting the locals, visitors discover a more nuanced situation than they imagined. Yet our ignorance still reaches new heights. China has a diaspora of about 70 million people in the West, who have integrated into our society and economy, and feed-back information to China. The messages coming from the 600,000 Westerners in mainland China are inevitably less rich. Knowing that the 21st century will be driven by information, through data, Western competitive disadvantage is likely to grow.
What is the “Great Turning Point” you refer to in your latest book?
The COVID crisis brought the world to a standstill. The planet will not remain the preserve of 700 million privileged Americans and Europeans, but an environment shared by 7 to 8 billion people. We need to reinvent our unsustainable way of life using digitalization. We Europeans are no longer experiencing growth, and we must look at China which has one-third of the world’s prospects. We cannot deprive our young people of this. Europe and China have never needed each other more to replace the United States which has entered into a stance of “cold peace” toward Beijing. The EU must not make the mistake of cutting off with China, like with the Global Investment Agreement of December 2020, frozen by the European Parliament, while the USA is increasing its business in China. Let us beware of American “false friends”.
Can you describe your business experience in China?
In Hong Kong today, I feel there are two China: one closing down but another one still eager to open up. As an investor, I still find attractive to analyze the new emerging economic model, taking 7 billion people into account, and no longer 700 million privileged people. The sharing economy, through digitalisation, is the only way to obtain this tenfold multiplier, like in e-commerce through social networks. A fascinating turning point for the investor is the continuous digitalisation of services, including those that have never really treated us as customers: banking, insurance, health, education, food. Artificial intelligence will make it possible to offer a personalised service at mass market prices. At the same time, we are dealing with a new governance environment and I advise investors to make sure that their business model benefits to China’s development. The indispensable support of the Chinese State requires this. And I also see that family- owned companies find it easier to find a similar backer here.