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China's Economy Bracing for a Bubble?

US reliance on a growing Chinese economy to continue to spur growth of the American economy could be an ill-fated notion, Bill Gross, Pimco's founder and CEO, told CNBC.

China weathered last year's global economic crisis by pumping a trillion dollars worth of bank loans into its economy and by pushing its interest rates down to zero, but their efforts could backfire, Gross said.

"Yeah, they’ve promoted recovery 8 to 9 percent in their internal economy, but now there are significant imbalances," said Gross.

David Malpass, president of Encima Global and member of the National Committee of US-China Relations, said that although bubbles may occur in the Chinese economy, it is unlikely any bubble will drag the U.S. economy into a double dip recession.

“Well, the U.S. Fed has the interest rate at zero so that’s like stuck on full throttle, so a lot of the money is going out of the U.S. to Asia, so it creates bubbles," said Malpass. "I think China can continue growing and bringing new demand into the new economy even though there might be some set back in their real estates. I don’t think China could drag the US back into a double dip.”