Economist Nouriel Roubini, renowned for his foretelling of doom and gloom in financial markets, has cast his doubts on China's ability to reform its economy adding that the possibility of a hard landing is yet to be ruled out.
Roubini, the co-founder of Roubini Global Economics, speaking at an event at the World Economic in Davos, said that the economy is too reliant on fixed income investment and the country had imbalances between the quantity and quality of its growth. He said that poor air quality and safety issues in China were examples of how it has failed to grow in an adequate manner.
"I worry that this is going to be a gradual process and China is not going to rebalance fast enough, compared to what is desirable and optimal, and therefore the risk of a potential hard landing have not been totally, actually cleared yet," he said.
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"They (the government) could be successful in this rebalancing but I would like to point out some elements, or at least skepticism, of why things might not turn out. And if you don't rebalance, instead of a soft landing you get a hard landing."
In November, China's new government unveiled much-anticipated details of the long-term economic reforms agreed to at its Third Plenum, a key meeting of the country's top leaders that took place the weekend before.
The 60-point reform plan is seen as paving the way for sweeping changes in the world's second-biggest economy as it tries to steer away from investment-led growth to a consumption-driven economy.
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But Roubini had doubts that the turnaround could work fast enough. He said that China has had previous lost decades and asked why this time it would necessarily be different.
During the fallout from the global financial crisis of 2008, Roubini said that China had recoiled and had doubled down on its same model of fixed income investment. He expected that the new government might be ready to do the same in any future episodes.
He also said that there were implementation problems and state sector organizations and interest groups —that may be against the reforms—would be well organized and be able to fight against any change.
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"Talk is cheap is so sweet, and we have to see action and so far we have not seen, in my view, as much action," he said.
However, there some positive aspects from the debate. He said is was learning Mandarin himself, and, if the government was able to reform and liberalize its asset market, then the yaun could become a new international reserve currency alongside the U.S. dollar.
—By CNBC.com's Matt Clinch. Follow him on Twitter