China will likely experience a bust soon, says Jim Walker, the founder of Asianomics.
Known as Dr. Gloom before the crisis in 1997 in Asia, Walker is predicting the country will face a gloomy prospect.
Walker said his expertise lies in pointing out the roadblocks that investors need to be wary of, Forbes reported.
“If all I'm telling you is that everything's fine, what do you need me for?" he said.
Walker and his one-person research shop in Hong Kong see little evidence that China can sustain its growth.
“There are an awful lot of companies that don't make any money in China, and they need to go,” he said.
The stimulus bailouts and an abundance of credit are keeping many companies in China afloat, Walker said.
China’s GDP numbers may not be reliable, he said.
“The people who think China is the answer to the world's problems are the ones who in 2005 said the U.S. housing boom could continue forever,” Walker said.
Walker advises investors to purchase in blue-chip stocks which also provide high dividend yields.
“We expect equity markets to go down quite sharply, so that's buying insurance,” he said.
China will face a growth rate in the single digits, said David Roche, an economic and political analyst who manages the Hong Kong-based hedge fund Independent Strategy, MarketWatch said.
“We've got the beginnings of a credit-bubble collapse in China,” said Roche.
China’s growth rate will land at 6 percent, he predicts.
“The economy in China has peaked, unless the economy in the U.S. really gets going and drives exports,” Roche said.
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