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Marc Faber: China is growing at 4% and that's okay

Marc Faber: China is growing at 4% and that's okay

China's economy is only growing at just over half the rate that authorities are reporting, perennial contrarian commentator Marc Faber, editor and publisher of The Gloom, Boom and Doom Report, told CNBC, but he said this was not something for investors to fret over.

"I think we are already at a 4 percent growth rate anyway. The figures that China publishes are figures they just take out of a drawer to make it look good," Faber - also known as Dr. Doom - told CNBC Asia's Squawk Box on Thursday.

Although Faber said China's growth is much lower than reported he noted that a 4 percent growth rate was not to be sniffed at.

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(Read more: 'Probably too late' to buy US stocks: Marc Faber )

"I think 4 percent growth in a world that is has no growth is actually very good," he said.

"It's like a hedge fund manager, he told me last year he makes 4 percent. So I say this performance not particularly good, and he said yes, compared to zero percent interest rates, that is a fantastic return," added Faber.

Faber also pointed out that it would be much healthier for China to growth at a slower rate with reduced credit risk.

"I'm not saying that 4 percent is as good as 8 percent, but it would be better to grown at 4 percent without a credit bubble than at 8 percent with a colossal credit bubble that will lead down the road to even larger problems," he said.

(Read more: We're in a worse position than in 2008: Marc Faber )

"And I think we have to realize excessive credit growth eventually leads to a crisis; this always happens. And in the case of China we do not have a credit bubble, we have a gigantic credit bubble," he added.

The Chinese government has foretasted that its economy will grow 7.5 percent this year. The most recent quarterly figures showed China grew 7.7 percent on year in the final quarter of 2013.

Faber asked investors to look at the recent slump in the Chinese stock market and commodity prices to truly evaluate the state of the country's economy.

Shanghai and London copper futures fell to multi-year lows this week, while the Shanghai Composite (Shanghai Stock Exchange: .SSEC) is down 5.1 percent year to date.

"I would like your viewers to consider: why is the China stock market doing so badly if everything is so great? Why is the price of iron ore collapsing and copper prices going down if everything is so great?" he asked.

"If you look at the import figures of the trading partners of China, they are all actually showing that exports of China are hardly growing," he added.

(Read More: Is China's bond default the tip of the iceberg? )

On Friday China's first corporate debt default in at least 17 years sparked fear that the country's 'Lehman moment' is fast approaching.

Many commentators have said the default is not as worrisome as it appears because Chinese authorities have the firepower to step in and bail out firms who are risk of defaulting on loans.

(Read more: China's Colossal Credit Bubble Next Big Risk: Faber )

But Faber countered this view, noting governments always try and give the perception that they are in control.

"If someone comes to me and says China has always managed to avoid... any credit problems [because it] has never defaulted, [that] doesn't mean it won't happen in future. The same was said about Japan. The Japanese also thought that way until 1989 and they lost control of it," he said.

However, Faber said we shouldn't worry about a crash in China because he believed the U.S. Federal Reserve could always shore up losses by printing more money.

"For the world, economic growth in China is very crucial. But not to worry, because the worse the global economy performs, the more geopolitical tensions we have, the more money printing we will have from the Federal Reserve. As it gives the clowns at the Fed another excuse to postpone the tapering," he added.

- By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie



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