China

Excerpt from remarks to Boston College Chief Executives Club  

September 2, 2016

TAKEAWAY: CHINA

Audience Member:
Thank you. Mr. Kent, China—little different place than here. Interested in your perspective on where it is today and where, for your company, you think it’s going to go in the next five or six years.

Kent:
Yeah, in the minutes preceding lunch, I was talking to a couple of people about China.  China is a long-term story. It’s a huge market. It’s done something the world has never done before, which is bring 300 million people into the middle class in a two-decade period. It’s never been done in the world before—ever in the history of the world. So let’s recognize what has been done.

Anything like that also has its own—the best dog in the world has fleas. All of that that has taken place, all that positive, there is some issues with that because of the speed with which it happened, because of the reliance on the export market and not reliance only on internal consumption. And they’re trying to balance that. You have to give China an incredible amount of credit for what they have done. It’s the first in the history of the world. Will it be replicated in the continent of Africa, the youngest continent in the world? Will it be replicated in India? Will it be replicated in Indonesia—350 million people in a Muslim country? Time will tell. We don’t know. It’s been done once.

The pendulum has swung in its fever against corruption. I salute Xi Jinping for what he’s doing in terms of trying to bring all of that to a balance, to an equilibrium. Now there is a little bit of a stalemate with governors, with mayors who don’t like to move as fast as before. But that’s all going to—the pendulum’s going to come back towards the middle, as it always does, as it always does. That’s how I see it.

Growth in China has slowed down. Some of the statistics do not relate to everyday life in China. Disposable income, which is something that we track, is much lower than the published GDP numbers. That’s the reality, and we all have to live with that. We go forward, continuing to invest for the future in China, because the future in China is going to be a very bright and very great future for all companies there, because of the dynamism of the people of China and that economy, too.