GO
Loading...

China Bubble Poses No Danger, Says Strategist

Wednesday, 30 May 2007 | 11:28 AM ET

The China bubble is no myth, says Michael Hartnett. But the global emerging markets strategist at Merrill Lynch says the global economy has nothing to fear -- yet. He joined "Squawk on the Street" to discuss China's "crazy" market and how far it still may go.

China's Stock Bubble
Discussing whether or not China is becoming the world's most populated stay away trade, with Michael Hartnett, Merrill Lynch global emerging markets strategist and CNBC's Erin Burnett & Mark Haines

On Wednesday, it was reported that Beijing is raising stock trading stamp duty to 0.3% from the current 0.1%, attempting to cool down the market as the Shanghai Composite Index climbed 62%.

China's superheated economic growth constitutes "a bubble, no doubt about it," Hartnett said. In an interview with CNBC's Erin Burnett, he said the market showed key characteristics: "Greed, leverage and going crazy with valuations ... going crazy with gains." But he maintained that China's market now has more resilience than in the past, as investors have gotten inured to volatility: "The word 'crash' is oversimplified," Hartnett said.

And he believes the bubble is only beginning to grow: Hartnett predicted that the Pacific country's market will be "up another 50% in the next year."

Featured

Contact

  • Showtimes

    United States
    Monday - Friday 9a ET
    Europe
    Monday - Friday 15:00 CET
    Asia
    Monday - Friday 21:00 SIN/HK
    Australia
    Monday - Friday 23:00 SYD
    New Zealand
    Tuesday - Saturday 01:00 NZ
  • Carl Quintanilla is an Emmy-winning reporter and co-anchor of CNBC's "Squawk on the Street," broadcast live from the NYSE.

  • Simon Hobbs co-anchors the 10 a.m. hour of CNBC's "Squawk on the Street" live from the New York Stock Exchange.

  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

  • Co-anchor of CNBC's "Squawk on the Street," David Faber also is a co-producer of CNBC's original documentaries.

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.