"For most of the time I was there I sat in traffic."

He made a short video about his trip, pointing out the empty shopping centre 60 Minutes filmed was never occupied because of a legal dispute but the mall down the road was "doing pretty well". People were milling about a KFC and a Starbucks and Mr Rothman even spotted a Major League Baseball shop.

Prime example

In the end, Zhengzhou wasn't a prime example of China's real estate bubble. Mr Rothman says it took two years to fill out because many people were waiting until the subway opened before moving into their new homes. It's not uncommon for Chinese people, unlike Americans and Australians, to move into their house a year or more after they buy it.

Mr Rothman is not in denial. He readily admits China's economy is slowing. His growth forecast for 2015, at between 6.5 and 7 per cent, is at the low end of predictions. But he differs from the more cautious China analysts in his belief there won't be a financial market crisis, a property crash or a hard landing.

Why? Mr Rothman argues the great rebalancing of China's economy, which people have been talking about for years, is actually starting to happen. The services sector over the past two years has been a bigger part of the economy than manufacturing and construction and it has been the main driver of jobs growth. In three of the past four years, consumption contributed more to gross domestic product than investment. And the role of state-owned enterprises in the economy is shrinking. That's not because the government is reforming the public sector but because private companies are becoming a more important part of the economy, responsible for almost all new jobs growth.

In the first quarter, new business registrations were up 38 per cent, while small private manufacturers told Mr Rothman they were planning to raise wages between 5 and 8 per cent this year.

All of this sounds like good news but not necessarily if you are an iron ore miner in Australia.


Even the optimists like Mr Rothman believe construction in China is past its peak. He doesn't think there will be a collapse in the property market but there will be fewer cities like Zhengzhou built in the future as China focuses on the new parts of its economy, like the services sector.

Lower demand

Construction accounts for more than half of all steel consumption in China, so any slow-down in building activity will result in lower demand for the key steel-making commodity in the years ahead.

China will still buy boatloads of iron ore from Australia but maybe not as many as the big producers were factoring in when they invested billions of dollars to increase production.

Asked what scared him, Mr Rothman said he was concerned there wouldn't be the right institutions or rule-of-law system in place in 30 years to allow a truly thriving private sector. But, again, the optimist emerged as he added that eventually China would get there because the Communist Party was "pretty pragmatic".

On that front, China has a very long way to go.