Marc Faber sees China growth at 4% — good news for its ‘gigantic’ bubble
From MarketWatch:
Official cheerleading aside, many think China is going to struggle to meet that 7.5% growth goal this year.
Try less than half, said contrarian investor Marc Faber, who
thinks real and current growth for the Godzilla economy is around 4%.
But the author of The Gloom, Doom and Boom
report said investors should be thanking their lucky stars that the
economy is not zipping along as fast as officials are saying it is.
“I’m not saying that 4% is as good as 8%, but it would be
better to grow at 4% without a credit bubble than at 8% with a colossal
credit bubble that will lead down the road to even larger problems,” Faber told CNBC late Wednesday, adding that what’s going on in China right now is not just a credit bubble but a “gigantic credit bubble.”
It’s better for everyone and pares back on that credit risk if China’s economy grows at a slower rate, he said.
Chinese bubble fears have been boiling over this week, triggered by disastrous trade data over the weekend and fresh worries that yet another Chinese company is headed for a bond default. Dr. Copper,
which gets its nickname from the commodity’s perceived ability to
predict turning points in the global economy, has been in the ICU. On
Thursday, copper prices
HGK4
-0.25%
were looking at a third session of trading at levels not seen since July 2010.
Faber says investors don’t need to read any tea leaves to guess what’s going on.
“…why is the China stock market doing so badly if
everything is so great? Why is the price of iron ore collapsing and
copper prices going down if everything is so great?” he asked. “If you
look at the import figures of the trading partners of China, they are
all actually showing that exports of China are hardly growing.”
China officials put their best Laker Girl impression on Thursday, rolling out Premier Li Keqiang’s news conference to mark the end of the country’s annual legislative session. The Shanghai Composite
duly rallied (though maybe that’s because those stocks duly
tanked the day prior) after he said the government stands by its 7.5%
growth target....MORE
