Marc Faber warns about China slowing down and buys European stocks

The publisher of the famous Gloom Boom & Doom report Marc Faber is very pessimistic about China these days. He warns that the biggest Asian economy will not be able to maintain its growth rate and will slow considerably. So Mr Faber is buying European stocks.

Marc Faber reminded in "Bloomberg Surveillance" radio interview that the growth rate China had in the last 10 years, was around 10 percent annually. But it is going to slow down considerably, Faber told. He added that he would rather wait to buy Chinese stocks until we see the result of the stimulus packages.

Chineese Government data last week showed that the country's exports grew 1 percent in July, missing the 8 percent median estimate of economists surveyed by Bloomberg. The Shanghai Composite Index (SHCOMP) has tumbled 13 percent from its high this year on March 2. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong lost 16 percent amid concern the economic slowdown is deepening.

Policy makers cut interest rates in June and July after two reductions in banks’ reserve- requirement ratios this year to counter the slowdown in the economy, which grew 7.6 percent in the second quarter, the slowest pace since 2009.

Now Marc Faber is buying European stocks as declines related to concern the euro may break up create opportunities for investors. The Stoxx Europe 600 Index (SXXP) has risen 16 percent since June 4 when it closed at the lowest level in more than five months.