Michael Bloomberg upbeat about Chinese economy despite fluctuations

Bloomberg suggested that investors put the stocks away and get back to business.

If you're an investor, you should buy stocks in companies that have a future -- that is the only successful investment strategy, he said.

"If you worry about the small, short-term ups and downs, you will always be too late to get in and too early to get out. So I wouldn't worry about that," he said.

The stock market plunge was further complicated by a sudden depreciation of the yuan on Aug. 11, after the People's Bank of China reviewed the way it calculated the central parity rate against the U.S. dollar.

The market responded with a 4.6 percent depreciation in the yuan-dollar central parity rate by Tuesday.

Bloomberg believes that the decision by the central bank was probably the right decision for China.

"I think, on balance, the government has a reasonable set of criteria so that people won't panic, but that market forces over a long period of time can set [the yuan's exchange] rates," he said.

Potential

"I suppose it's normal that people will say: 'Oh, is this the beginning of the end?'" Bloomberg said.

"Don't always feel that the world is coming to an end [in] the real world, nothing goes in a straight line [...] Business people don't go up and down every day. They look to the future."

He said that in the longer term, China's economy is still growing, and small fluctuations are natural, given the impressive progress and length of growth.

China, he said, was once a country where everybody went around on bicycles and very few people spoke English. Today, there are cars everywhere, and the average person has much more than ever before.

"The Middle Kingdom used to be very isolated, and today [...] it is very willing to look outside -- at other people's experience, and if they think it fits, they adopt it."