Saturday, August 31, 2013

The Economy in China is much weaker than it is generally perceived

HAI: Finally, what’s going on with China? Has the government been successful in the ongoing transition to slower growth?

Marc Faber : In my view, the economy in China is much weaker than it is generally perceived and the problems are larger than generally perceived. The stock market in China has been very weak since 2006 and has underperformed just about any other market over that period of time. In general, I would be very careful to invest now in emerging economies, especially under the condition that we have had declining trade and current account surpluses in most emerging economies.

In the last 20 years, we’ve grown in China by approximately 8-12 percent per year. Going forward, China will be lucky to grow at something like 5 to 7 percent per annum. There may be years when it only grows at 3 to 4 percent, or not at all.

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.


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