Thursday, July 15, 2010

Marc Faber Says China Growth Should Continue to Weaken

Market pundit Marc Faber, who publishes the famous Gloom, Boom & Doom report, said he sees the economy of China probably weakening over the next several months, and reiterated they could experience a property crash before the end of 2010.

The Chinese economy is already starting to show signs of slowing down, as recent reports say gross domestic product fell from last quarter's 11.9 percent growth to 10.3 percent over the last three months. Analysts had been looking for a 10.5 percent growth rate.

China has been projecting an 8 percent growth rate over the year, but at their current pace should still handily beat that, depending on whether or not the government takes any more steps to cool the economy off, especially the property market.

Some still think China isn't doing enough to slow the economy down, and it will ultimately experience a painful correction in response to that.

China has also been battling inflation, with a goal of bringing it down to 3 percent on the year, which they have now achieved, with it operating at a 2.9 percent rate in June.

The question is whether or not China has done enough to slow things down, and if the pace is low enough. Faber doesn't seem to think so, and he could be right, although, again, he sees it slowing down through the remainder of 2010.

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