Soft landing for China economy will not be easy

I think it's very difficult if you had the kind of bubble like you had in China, and the credit bubble, to then engineer a soft landing. You could maybe cushion the downturn somewhat, but the fact is I don't believe that the economy isn't growing at all, but I think that I have argued and this for the last 18 months that the economy was slowing down meaningfully, and that growth would be roughly at three to four percent, which it is at the present time, I would imagine.

China is a massive country

I think many people don't understand that China has a population twice as large as the U.S. and Europe combined. It's not just a country. It's an entire empire. And you can have growth in some sectors of the economy. I have no doubt that some service sectors are growing, but other very important sectors like industrial production isn't growing at the present time.

     
If you really want to have a good view of the service sector and how well it's doing in China, ask Yum!, the fast-food chain in the U.S. They will tell you about their Chinese sales.

And the way the U.S. had sometimes a recession in California like in the early 1990's, and other states were growing, you can have in China some provinces growing and others contracting. And so and to measure economic growth in a country this large with that many people is very difficult. But say the evidence shows that it's nowhere growing at the same pace it was growing say between 2000 and 2007.

Credit bubble disaster ?     

And what we have had in China, and this investors should realize, is a credit bubble of epic proportions. I have read economic history. I've never seen credit as a percent of the economy growing as fast as in China in the last seven years.