Roach: No magic number for China growth

Investors shouldn't fret over lower growth forecasts for China, economist and senior fellow at Yale University Stephen Roach told CNBC, noting there are no magic numbers when it comes to economic growth.

"[Just] like the Fed [Federal Reserve] is backing away from magic numbers on the U.S., there is no magic number for any economy," said Roach, who previously worked as chairman for Asia at Morgan Stanley.

China's economy is now more geared towards the services industry, which is positive according to Roach as each unit of output in a services-based economy generates 30 percent more jobs than in a manufacturing and construction-based economy.

(Read More: Fresh worriesover China prompt slew of downgrades)

"What used to take 10 percent of Chinese growth to absorb surplus labor and deal with poverty can now be done at 7 percent. So they can grow much, much more slowly, and still absorb the surplus labor," he added.

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Stephen Roach

Many analysts have turned more bearish on China in recent years, as the government's plan to transition from investment-led growth to more a more consumption-driven economy has slowed the pace of growth from the double digit levels seen in recent decades.

China's economy grew 7.7 percent last year and the government is targeting 7.5 percent this year.

Goldman Sachs lowered its forecast for 2014 to 7.3 percent from a previous projection of 7.6 percent late Wednesday.

(Read more: China's debt problems are bad, but not Lehman bad)

The shortage of low-cost workers in recent years has also been a key concern for analysts. In 2013, wages for Chinese migrant workers increased 13.9 percent on year, data from the National Bureau of Statistics showed.

Meanwhile, the impact of China's shrinking working-age population on economic growth - a product of the country's strictly enforced one child policy - is also a worry.

But Roach told CNBC there was still an abundance of low-cost workers in China ready to be put to work in the newly services-focused industries.

"They [China] still have 45 percent of their population living in an impoverished state in the country side. And in a service-led economy those workers can be put to work, especially in the newly urbanized areas that were detailed in their urbanization blueprint," he added, referring to China's National New-type Urbanization Plan unveiled on Monday.

(Read more: China's yuan takes first big swing in wider band)

"The services sector is now larger than the combined manufacturing and construction sectors for the first time," he added.

Roach urged more bearish China watchers to take a broader perspective.

"So these American executives who like to whine about slow growth in China, which is growing at five times the speed of demand in their home markets, need to look to this next China as opportunity not a concern," he added.

— By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie