Business News

Power Play: Why China is not broken

Richard Madigan, CIO, J.P. Morgan Private Bank
Adam Jeffery | CNBC

The Shanghai Composite continues to fall, dropping 2 percent on Thursday, and is now down about 20 percent over the past two months.

But Richard Madigan, chief investment officer at J.P. Morgan Private Bank, who has more than a trillion dollars in assets under management, tells CNBC's "Power Lunch" do not panic.

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"China 'slowing down' isn't news but the policy misstep around how they have handled local A-share markets (up and down) has paused momentum. Something has shifted. But China isn't broken and commitment to reform is real," Madigan said.

He believes now is the time for the Chinese government to rebuild domestic confidence and trust.

"As much as it goes against the grain of transparency, governance and price discovery across developed equity markets, it's better for everyone that local Chinese markets right now remain controlled, contained and gradually deflated," Madigan said.