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China will roar back to 10% growth: Weinberg

A Chinese bank staff member counting stacks of 100-yuan notes at a bank in Huaibei, east China's Anhui province.
AFP | Getty Images
A Chinese bank staff member counting stacks of 100-yuan notes at a bank in Huaibei, east China's Anhui province.

The latest economic data out of China may have just highlighted the country's slowest growth in 25 years but one analyst says a return to rapid expansion is due.

"I think it's time to look for China to recover and for it to move back toward its trend growth which is really about 10 percent," Carl Weinberg, chief economist and managing director at High Frequency Economics told CNBC Tuesday.

"This business cycle is pretty much cooked to the downside and this economy is about ready to get going," he said

Weinberg claims China's current slowdown is a repeat of the country's recent economic history.

"Over the last 35 years we have seen three and a half of these cycles and none of them have been deeper to the downside that the present one. The logical thing to look for is a recovery".

China wants its economy to be more dependent on services and consumption.

However Weinberg says Beijing's economic policy has little growth impact compared to the natural process of a modernising economy.

"I'm a very strong believer in the long term secular power of modernisation. They are moving 10 -20 million people a year from farms to cities. That's the key number from this morning's report," he said.


China’s equity casino

In spite of the low gross domestic product figure, local equity markets appeared to welcome the news. For the day the Shanghai Composite finished up 3.2 percent.

But Weinberg says linking GDP to Chinese equities is like going to the casino.

"The correlation between China's stock market and the GDP is barely better than zero," he said.

"So if you want to bet that the stock market is going to down because the economy has printed a bad number you might as well take your money to the slot machines." he said.