Chinese consumer is the 'single most important thing' in the world economy, Jim O'Neill says

  • Chinese growth, a big driver of the global economy, is slowing.
  • Former Goldman Sachs chairman Jim O'Neill said the one worrying element is consumer spending.
  • Closer to home, O'Neill said Brexit with "No Deal" has a 20 percent probability.

Former Goldman Sachs Chairman Jim O'Neill has told CNBC that the single most important thing in the world economy is reviving the Chinese consumer.

China's official government figures said the country's economy slowed last year to 6.6 percent. The country is enduring an ongoing trade war with the U.S. while attempting a long-planned transition from a manufacturing and export-led economy to a consumer-driven model.

O'Neill who now acts as chair of Chatham House, an international affairs thinktank, told CNBC's "Street Signs" on Thursday that it was no surprise the country's growth had dipped.

"People shouldn't be freaking out, the demographics have turned," said O'Neill before adding that some of the reduction in growth was planned by Beijing.

The former Goldman supremo noted that while the headline growth figure of 6.6 percent last year was the slowest in almost three decades it was also, year-on-year, "still equivalent to adding another Australia."

O'Neill did note one area of concern that Beijing authorities were struggling to address.

"The one thing that does bother me is the Chinese consumer is slowing, that's not supposed to happen," he said before adding, "The single most important thing in the world economy is the Chinese consumer slowing down."

Brexit aggressiveness

With just 50 days until the U.K. is scheduled to leave the European Union, the mood between the two parties has soured after EU Council President Donald Tusk suggested on Wednesday there would be a "special place in Hell" for Brexiteers who had still offered no-exit plan.

O'Neill told CNBC the rhetoric was perhaps "a bit surprising by Brussels leadership standards," who were "normally extremely diplomatic," but did not come completely out of the blue.

"It doesn't look like the Brexiteers have thought about Irish border question at all, so kind of not surprising so for Brexiteers to feel a bit of their own general aggressiveness, you know they are not the only guys that can be mean and tough."

O'Neill said his own probability of Britain and Northern Ireland leaving the U.K. with no deal was about 20 percent.

He added there were signs that U.K. Prime Minister Theresa May, who visits Brussels Thursday, looked to be trying to weaken the resolve of the hardcore Brexit elements in her own party in order to get a withdrawal deal struck.

"I wonder if the PM is trying to play a sort of Machiavellian game. She's sort of trying to split the hard core Brexiteers and she has sort of dragged them to a slightly different position."