Market expert Mark Mobius of Mobius Capital Partners warned investors against doing business with China and claimed investment outflows from his HSBC account have been "restricted" by the country, while recommending India and Brazil as being more transparent for investors.
"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. So I would be very, very careful investing in China," FOX Business quoted Mark Mobius as saying on their business show, which was also picked up by Business Insider.
The founder of Mobius Capital Partners was quoted as saying that China's economy is headed "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. 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," FOX news website quoted Mobius.
In contrast, Hong Kong "seems to be a little more open," he claimed. He said he had not trouble to get his money "in and out" of the financial centre.
Mobius said investors should look at India as a viable alternative with the most economic opportunity, while claiming that one billion individuals can perform the same tasks as the Chinese.
"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.
Speaking of Brazil, he suggested that investors take into account the fact that it is more welcoming than China.
"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," Mobius said.
The comments of Mobius come just days after the American Chamber of Commerce in China citing survey results said US businesses operating in China are increasingly pessimistic about their prospects in the world's second-largest economy.
Just less than a month ago, Mobius said in an interview to Moneycontrol that there is a good probability that investors will profit more in India than in other equities markets given the optimism regarding country's future growth trajectory.
"Growth rate in India is superior to most countries around the world and it can also be sustained in the long run on the back of the positive impact from the shift from China to India in terms of software and production, supported by the massive technology change," Mobius had said.