Americans Don't Quite Understand 'This' About China's Economy

Can Beijing engineer a soft landing?

That's what pros will be looking to next, believing the fortunes of the stock market now rest with China – especially if Europe has managed to ring-fence it's financial crisis.

And lately economic data hasn't looked that good. For example, the HSBC Flash Purchasing Managers Index (PMI) showed China’s manufacturing activity slowed in June.

It was the 8^th consecutive month of weakness.

Is China about to drag down the stock market?

Jing Ulrich, JPMorgan, Chairman of Global Markets doesn’t think so. First and foremost she expects Beijing to remain aggressive in its attempt to stimulate growth.

“I expect the central government will continue with loose monetary policies,” she says on CNBC's Fast Money Halftime Report. “I’m looking for further rate cuts – perhaps another cut in Q3 and a cut in reserve ratios in the second half of the year.”

However, she says there’s a trend underway in China that many Americans don't quite understand -- China isn't slowing, so much as rebalancing.

That is, where growth once came from heavy industry, China's economy is now fueled by something else - consumers.

“In year's past China relied on exports and heavy industry for growth. But the first half of this year a lot of China's growth came from the consumer sector. Going forward it's consumption that will be a major driver for China’s growth.”

And Ulrich says China's consumer is doing just fine. "Unemployment in China is around 4.3%," she says.

Although Ulrich admits that “domestic demand isn’t enough to offset slower growth, entirely” she certainly doesn’t see anything close to a hard landing. “Our forecast for GDP growth is 7.7%.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On June 29, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long C; Anthony Scaramucci is long GS; Anthony Scaramucci is long JPM; Anthony Scaramucci is long IBM; Anthony Scaramucci is long NKE; Anthony Scaramucci is long T; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long C; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long FB CALLS; Pete Najarian is long MSFT; Pete Najarian is long NOK; Pete Najarian is long NKE CALLS; Pete Najarian is long PEP; Patty Edwards is long for clients AAPL; Patty Edwards is long for clients GLD; Patty Edwards is long for clients INTC; Patty Edwards is long for clients COST; Patty Edwards is long for clients SBUX; Patty Edwards is long for clients AMZN; Patty Edwards is long for clients FB; Patty Edwards is long for clients MSFT; Patty Edwards is long for clients WFM; Patty Edwards is long for clients NKE; Patty Edwards is long for clients VZ; Patty Edwards is long for clients T; Patty Edwards is long for clients CTSH; Patty Edwards is long for clients PVH; Patty Edwards is long for clients CBI; Patty Edwards is long for clients BGS; Patty Edwards is long for clients MCD; Patty Edwards is long for clients MO; Patty Edwards is long for clients CTL; Patty Edwards is long for clients BKCC; Patty Edwards is long for clients AGNC; Patty Edwards is long MCD; Jon Najarian is long call spreads in NKE; Jon Najarian is long call spreads in TIF; Jon Najarian is long call spreads in CSCO; Jon Najarian is long call spreads in EFA; Jon Najarian is long call spreads in MMR; Jon Najarian is long call spreads in PBR; Jon Najarian is long call spreads in MNST; Jon Najarian is long call spreads in GRPN; Jon Najarian is long CIGX; Jon Najarian is long CBOE; Jon Najarian is long CME; Jon Najarian is long DDMG

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CNBC.com with wires.