China continues 'new normal' growth: Morgan Stanley

Head of the world's leading investment bank has confidence in China's economy, which is experiencing a slowdown under the "new normal."

"In the next three to five years, China's economy will continue to grow at a faster pace than any of the major developed markets," said James P. Gorman, chairman and chief executive officer of Morgan Stanley.

Gorman made the remarks in an interview with Xinhua on the sidelines of celebrations for the 20th anniversary of Morgan Stanley in China.

The number of Morgan Stanley employees in China has increased to over 1000 in 20 years, while China has become one of the investment bank's most important markets and a "new normal" economy has emerged.

One of the features of this "new normal" is much slower growth, dragged down by a housing slowdown, softening domestic demand and unsteady exports to a low not seen since the 2008/09 global financial crisis.

In the 35 years between 1978 and 2013, annual growth of the Chinese economy averaged close to 10 percent and, between 2003 and 2007, it was over 11.5 percent.

"The 'new normal' is still very strong growth, not spectacular growth in terms of percentages, but spectacular in terms of absolute economic output," Gorman said. The chairman expects the economy to grow at between 6 and 7.5 percent in the next few years.

"This is somewhat slower than it was ten years ago. However, growing from that large base at 6 to 7.5 percent annually is a phenomenal achievement for an economy of this size," he added.

As to concerns over a slowdown, Gorman said, "I have high degree of confidence that China is not heading for a hard landing, but it will still manage very attractive growth for the next several years."

China's economy is not short of driving forces. According to Gorman, growth will be propped up by liberalization of the market, improved efficiency in state-owned enterprises (SOEs), urbanization, increased productivity, domestic demand and less reliance on exports.