China’s Economic Downturn Is the New Normal: Expert
China's economic downturn represents the beginning of a "new normal" investors will have to adjust to, Dr. Wang Qing of the China International Corporation told CNBC on Tuesday.
"The new normal for China's economy is slower growth , higher inflation, and a profound change of economic structure away from investment driven growth towards a more consumption driven growth, " Qing said.
Markets have been focusing too much on how slowing external demand is impacting the Chinese economy, rather than looking at China's changing domestic housing policy which is denting Chinese growth, according to Qing.
In his view "the single most important factor in explaining China's slowdown and the weak demand for commodities is the draconian housing policy the Chinese government has been imposing to try and deflate housing prices since the second half of last year."
Andrew Leung, CEO of Andrew Leung International Consultants, told CNBC that Chinese economy and society are at "a turning point".
China's economy is turning from an export-led economy to a more balanced economy, and China's export markets are increasingly shifting their focus towards emerging markets, rather than merely focusing on developed countries, according to Leung.
Leung also noted that China's economy is adjusting from a high growth model to a more sustainable lower growth model.
Markets are looking ahead to China's quarterly growth figures due to come out later in the week. Although many investors are betting on "a hard landing, there is no concrete evidence this will be the case, " Andrew Leung, CEO of Andrew Leung International Consultants, told CNBC.
China's economy has been growing at its slowest pace in three years as investments weakened and demand fell in key markets such as the U.S. and Europe .
This year China's gross domestic product (GDP) rose by 7.6 percent year-on-year in the second quarter. The figure is down from 8.1 percent in the previous three months and compares to average GDP growth of about 10 percent between 2000 and 2010.
China's policymakers recently have been trying to revive economic activity by easing monetary policy . Early last month the Chinese government stepped up stimulus plans to revive economic growth by approving 60 infrastructure projects worth more than $150 billion, and earlier this year the Chinese government announced plans to start constructing 7 million public housing units and complete 5 million units.
Written by Liza Jansen, special for CNBC.com. Twitter: @lizajansen