Felix Zulauf: China actual growth is at a 3% rate

Investment guru Felix Zulauf expressed his opinion that most of the investors are overestimating China's growth rates and in the meantime are underestimating the problems in the Asian country.

The president of Zulauf Asset Management AG made his statement during the Fifth Annual European Investment Conference and added that the slowing growth in China is a foretoken to a global economic crisis that will strike every single region.

Swiss hedge fund manager Felix Zulauf indicated that "excessive" booms always lead to a bust, and China’s will be no exception. HSpeaking at an investor conference sponsored by the CFA Institute in Prague, Zulauf said China is actually growing at a 3 percent rate than official reports of nearly triple that level. Earkier this month a 7.4 percent rate was reported by the Chinese government.

In his view, market commentators underestimate the problems in China. Zulauf said that while China's new leadership may implement a "timid stimulus", it won't have much effect, and that a "credit boom in reverse" seems imminent. Like any aftermath of an "excessive" boom, China will end up going bust. Consequently, public growth forecasts for Australia, Latin America and other natural resource countries are too high.