How Worried Should We Be About China's Slowdown?

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March 18 (Bloomberg) –- Francisco Sanchez, former Commerce Department undersecretary for international trade, discusses the state of China's economy with Trish Regan and Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)

He was a member of the president's commission to china.

How do you feel about china now?

We are hearing from everyone to marc faber that it is a problem.

The truth is china is growing at a slower rate and has been for about three years.

[indiscernible] i would say we have still done reasonably well.

We had record exports in china, and last year we exported over 120 billion dollars.

If there is a precipitous drop in their growth, it is going to reverberate around the world.

I would caution those sounding the alarms.

This is someone -- yesterday, marc faber of the boom, doom, and gloom report -- you know what that is going to be, right?

He said he could see the system unraveling.

Here is what you said.

A friend of mine who trades china very carefully, that trade finance between one state owned enterprise in a private company, has -- it has amounted to over $5 million by rolling over the same collateral times.

It is not a funny thing that is happening in china and when the whole thing unwinds, it is going to be a disaster.

"when the whole thing unwinds, it is going to be a disaster." that is the operative word from marc faber.

China at the end of the day -- this is a state run economy.

So, they have the ability -- it is a command economy.

They have an ability market -- true market-driven economies wouldn't. president xi is at least talking a good game, saying he will not bail out every soe that comes around with problems.

When it happens, there could be shocks to the system.

I think long-term, it is probably good for china and for the world economy that they get back on more of a market based approach.

I was having lunch with someone who runs a business in china, and he said a lot of other business owners that he talks to will inflate numbers and lied to each other when they are discussing things.

They just raised $5 million in the vc round.

They will say they raised $10 million.

That is just the way it works there.

I can't speak to that.

What i do know is their growth has been steadily declining, but that should be expected, to have record double-digit growth for nearly 30 years -- i do not think you would expect that for another 30 years.

Whether they cook the numbers or not, their growth is slowing.

My feeling is if it is not a precipitous drop, it will not have a huge reverberation for the u.s. economy or the world economy.

But it does say we need to diversify where we do business.

We can't put our eggs in one basket.

Diversification is a rule that people should spread across their life and finances.

Marc faber told us he still sees growth.

About half of what china says.

Better than a stick in the eye, you know?

Thank you, francisco sanchez,

This text has been automatically generated. It may not be 100% accurate.

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