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.
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."