Mobius: A tour of China

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Mark Mobius, Templeton Emerging Markets Group shares insights from his multi-city tour of China

My team and I recently completed a multi-city tour of China, mainly via high-speed rail. We’ve explored cities including Shenzhen, Nanning, Guiyang, Changsha and Wuhan, searching for potential investment opportunities and seeing the economic conditions in China first-hand.

This last stop on our tour offers a look at Nanchang and Fuzhou in southeastern China. The fact that China’s economic growth rate is decelerating is already well-known, but we have long expected this to happen as the country transitions to a new model driven by domestic consumption.

Throughout China, we witnessed this economic transformation, with clear pockets of strength in many service sectors, including leisure and tourism, that seem to be offsetting slowing in some industrial, export-oriented areas of the economy.


We left the hugely impressive Wuhan station for Nanchang, the capital of Jiangxi Province. With a population of five million, Nanchang is a major metropolis and the Chinese characters for Nanchang mean “south prosperity,” but it’s considered a “second-tier” city.

Nanchang is located on the Gan River which combines with other rivers to form Poyang Lake, China’s largest freshwater lake. Like Wuhan, Nanchang has a strategic position connecting East and South China and is a major railway hub. Nanchang is where the Red Army (the People’s Liberation Army) was founded, so when Chinese tourists visit, it is often called the “red tour” or “red trip.”

One of Nanchang’s famous attractions is the Pavilion of Prince Teng (Tengwang Pavilion) on the east bank of the Gan River. It was originally constructed in 653 AD by Prince Tang, the younger brother of Emperor Li Shimin of the Tang Dynasty, but was destroyed a number of times over the years and rebuilt.

The latest reconstruction is beautiful and in the Song dynasty architectural style. My colleagues and I climbed up the nine stories of the 58-meter tower and had a fantastic view of the river. Inside there were interesting displays on each floor showing various ancient artifacts, paintings and mosaics.

One floor even has a theater with performances and music of that time period, and there’s a store with probably the largest collection and variety of beautiful porcelain I have ever seen. Apparently the tower has become a center for the city’s antiques trade.

The value of the pavilion tower to the people of Nanchang is exemplified by a saying that if the tower falls, the treasure and resources of Nanchang will no longer exist.

We also visited a major shopping mall which caters to families and youths. The company that developed the mall also plans to open a leisure complex catering to tourists with a theme park, cinema, aquarium and hotels. Executives we spoke to at the company told us they consider the following when determining where to build projects: population (at least 500,000 people must live in the area); the area’s macro economy/growth rate; and its total retail sales of consumer goods.

To get a sense of other investment opportunities, we also met the executives of the Department of Commerce of Jiangxi Province. They were eager to help and gave us a presentation highlighting the attractiveness of the province. They highlighted its favorable geographic location in the middle of southeast China with a population of 45 million, and its plentiful water resources with more than 2,400 rivers in the province including the largest freshwater lake in the nation (Poyang Lake).

The province also has forest resources, mineral resources such as copper, tungsten, tantalum and other rare earths, tourist attractions with beautiful mountains and World Natural Heritage Sites, and agriculture including grain, vegetables, oranges, livestock, poultry, aquatic products/seafood, tea and tea oil. It was quite a diverse list!

Our final visit was with an automobile manufacturer. Executives of the company said that competition was tough in China, and while its light trucks and pickup trucks are sold in more than 70 countries around the world, the relatively strong Chinese renminbi (RMB) was making exports more difficult.

We were set to depart Nanchang late in the afternoon and grabbed some fast food to eat in the train station. I purchased a snack made of pounded cooked rice rolled into a ball with sweet filling inside (called mochi in Japan). The box containing the rice balls had pictures of generals and a monument. When I asked my colleague Chris about it, he said the pictures were of some of the great Red Army generals who came from Nanchang during the revolution.

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