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China economy fears overdone, inevitable bumps on reform road: HSBC boss
[LONDON] Volatility in China's markets is inevitable as it implements reforms and its economy is unlikely to have a "hard landing," HSBC Chief Executive Stuart Gulliver said on Friday.
"The fears for China's economy are overplayed. I do not believe China will have a hard landing," Gulliver said in a speech on the country in London. "The last few months have obviously been difficult... (But) the fluctuations and stock market volatility have little or no bearing on the long-term trends around China," he said.
He said HSBC still expected China's economy to grow by about 7 per cent this year and said the world's second largest economy "will continue to outpace global growth".
China's decision to allow its yuan currency to move more freely and sluggish exports and slowing growth have raised concerns about its economy, and spooked investors there and wider.
Gulliver, whose bank is based in London but was founded in China and makes most of its money in Asia, said the bumps are part of China's reform path. "China is part of the way along the path of reform. It is attempting a transition that is far from straightforward. "It is moving from an economy built on the power of the state to one increasingly supported by the private sector and it is doing this while unwinding and reducing reliance on local government debt and shadow banking and simultaneously developing its capital markets.
"China should and will continue to ease controls in a steady and measured manner," he said.