Hedge Fund Chief Sees China in Transition

China is in a historic period of transition and is evolving to become a more open society, according to David Rubenstein, co-founder of the global private equity fund The Carlyle Group.

Rubenstein said China's fast growing population, along with the political transition set to take place under new president Xi Jinping, marks a turning point for a nation that in the past has tried to remain insular. 

"It's impossible to take 1.3 billion people and keep them closed to the rest of the world," Rubenstein said Thursday at the Washington Ideas Forum. "You're not going to be able to go back to the system you had before." 

Rubenstein, who has overseen billions of dollars of investment in China, also said the country is ripe with entrepreneurship. "There are more entrepreneurs per capita then there are anywhere else in the world," Rubenstein said of China. "In the business world, they are as determined to be successful as people are here."

Rubenstein also called on Congress to solve the fiscal cliff. He said doing nothing would cause harm to the U.S. economy and send a signal of incompetence to the rest of the world. "They know what they're supposed to do. They know they have to solve the fiscal cliff but they don't know how to do it," Rubenstein said of Congress. "How can this country be the leading country in the world when we can't solve these problems?"

Rubenstein added that he thought Democrats and Republicans would come to an agreement but that it would not solve long-term issues. "I think they will come up with a one-year bargain. There will be something for everybody," Rubenstein said. "I don't think it will be very pretty."

After the fiscal cliff is solved, Rubenstein says businesses will better be able to make decisions for their future. "What business people want is certainty," he said. "Just tell us what the rules are and we'll figure out how to deal with them."

Rubenstein, a noted philanthropist, also said that Americans, while the most generous people in the world in terms of money given to charities, could give more.

"The implication is that you have to be a billionaire to be a philanthropist," he said. "I want everybody to feel they should give some of their time or money. More people at all levels of income should do it."