A senior Allianz economist has expressed optimism about China’s economy and predicted the country will deliver a 6.5 percent annual growth this year.

Generally speaking, China’s economy is not doing as badly as some have said, Michael Heise, Chief Economist of Allianz Dresdner Economic Research, said during an exclusive interview with Shanghai Securities News.

Heise has always paid attention to China as the country is now settling into a “new normal” of lower growth rates. “This year, China’s GDP growth will slow to 6.5 percent from 6.9 percent last year,” he predicted.

The country is in a transition from an investment- and export-led growth model to one powered by consumption. This transition cannot be accomplished in one step, he said.

“Given the policy tools that the government and the central bank could use, we predicted that China will ensure a stable economic growth and avert a sharp slowdown.”

“In addition, the trend of personal consumption gives us more confidence in China’s short-term prospects, meanwhile, the market sentiment is still positive.”

When talking about China’s insurance market, he said that last year China ranked third in terms of written premiums, only behind the United States and Japan.

“We predict China’s insurance industry will see double-digit growth during the next ten years, with an average growth of 12 percent.” China will overtake Japan to become the second-largest insurance market in five years, he added.