China's GDP Growth In 2018 Was Lowest Since 1990

The latest round of economic data from China showed the country's economy grew at just 6.6 percent last year, which marks the slowest pace seen since 1990.

Is The Economy Contracting?

Xiang Songzuo, a university professor in Beijing, estimated in December China's economy at most grew just 1.67 percent and left the possibility open that the economy even contracted. His analysis may have validity as China's economy showed signs of contracting in December and is likely to continue slowing even further in the coming months, Gordon Chang, author of "The Coming Collapse of China," told CNBC Tuesday morning.

It's "brave" for Songzuo to claim the Chinese government added an extra 5 percentage points to its official economic growth numbers although his stance has been apparent for many years, Chang said. The official government numbers could be misleading as far back as 2016 when the World Bank suggested the Chinese economy grew 1.1 percent. This figure is consistent with the "single most reliable indicator of Chinese economic activity: total primary energy consumption."

In 2016, official Chinese data showed total primary energy consumption grew just 1.4 percent.

"What you are looking at is an economy that has been growing in the one-sies, two-sies, over at least the last three years," Chang said.

Slowdown Will Last

Shen Minggao, chief economist at Guangfa Securities, said on Bloomberg the slowdown in China's economy was mostly expected by the market. In fact, the economic slowdown will likely persist for two key reasons: 1) Many sectors in China are showing only a single-digit growth rate while some traditional growth sectors could show a negative rate and 2) the Chinese government may not be able to introduce new growth drivers for at least three to five years.

Despite a bleak outlook, a slowdown in China's economy isn't necessarily a concern as a slowdown is "good for the longer term" as it will bring needed structural changes, Minggao said.

China Shifted On Trump

David Rubenstein, co-founder and co-executive chairman of the Carlyle Group, told CNBC the Chinese government may have recently shifted its opinion on President Donald Trump and his stance on China.

At first, Trump's politeness towards the Chinese government gave the impression he didn't really mean what he said about being "tough on trade." But now the Chinese government understands Trump is "very serious" on trade, he said. If for whatever reason Trump "were to depart tomorrow," there is a line of politicians who hold a similar stance. Rubenstein said the president's stance on China is likely viewed favorably by as much as 45 percent of the U.S. population.

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