China's GDP figures in the first quarter indicated that the economy is not heading for a major crash, vindicating observers who say that China will manage to engineer a soft landing.
The Chinese economy expanded 8.1 percent in the first three months of the year, compared to an 8.3 percent growth predicted by economists in a Reuters poll. This is in line with an engineered slowdown, market observers say.
"Is this a hard landing? No, it's a soft landing, very much in line with expectations," Tony Nash, managing director of IHS Global Services, told CNBC on Friday after the numbers were released. "If it's under 7.5 percent, then it's definitely cause for concern."
The first-quarter figures will further polarize observers who say that the Chinese economy is heading for a crash and those who think that Chinese authorities are managing to clamp down on too-rapid growth and asset bubbles successfully.
Those in the bearish camp include “Dr Doom” Marc Faber, who told CNBC late last year that a hard landing in China is possible and will have "devastating" effects on the economy. Bill Smead, CEO of Smead Capital Management told CNBC on Friday before the GDP data were released that he expects the number to come in at 7.5 percent "at best".Page 1 of 3 | Next Page