(Bloomberg) -- China may stem its real estate crisis but the economy will only grow tepidly and probably won’t ever overtake the US, according to Klaus Baader of Societe Generale SA.  

The French bank’s global chief economist, who formerly worked in the Asia-Pacific region, told Bloomberg Television that even if a “piecemeal attempt” by authorities to stabilize housing succeeds, the country has more significant problems.

“What I’m much more concerned about is, will you be able in China to rebuild confidence in the private sector — and that I think is a much bigger challenge,” he said. “The great Chinese growth story is over.”

Worries about a possible liquidation of China Evergrande Group pushed property stocks there down by the most in nine months on Monday. Last week, the OECD cut its projection for the country’s gross domestic product, saying output probably won’t exceed 5% next year.

“People have been speculating, when is the Chinese economy going to be bigger than the US economy, and I don’t think it’s going to happen,” he said. “Because a model of industrialization — and housing-driven — you can’t do that for ever, particularly not when your population is shrinking.” 

Baader, a veteran of Lehman Brothers, said the “key risk” of a Chinese financial implosion reminiscent of that US bank’s failure in 2008 probably won’t materialize because the banking system is controlled by the state. Even so, he reckons weak expansion will be the norm.

“The worst in terms of economic growth for China is behind us, but it’s going to be a very moderate growth pattern — incomparable to what it was,” Baader said. “I fear that the Chinese growth model has been broken and so far, no-one has come up with a new model.”

--With assistance from Dani Burger and Manus Cranny.

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