OREANDA-NEWS. December 23, 2014. Oil prices will stay around USD 60 a barrel for the next five years as China's economy cools down, economist Andy Xie told CNBC.

Oil prices had risen so high because of China's boom, the former Morgan Stanley and IMF senior economist said in a "Squawk Box" interview. China is now transitioning from a 15-year super cycle that built up a massive industrial machine, and the economy must cool down to digest overinvestment, which will drag down commodity prices, he said.

"When China goes into normal situation, I think that the oil price will become normal, too, so \\$60 would be the normal price for the next five years or so," he said.

Xie predicted the oil price plunge to USD 60 in September as China's energy demand tapered off. He said oil price declines are trailing the slide in coal, but he expects the gap to narrow.

"Coal is down 60 percent, so eventually I expect oil to come down 60 percent, too," he said.

The price of U.S. crude oil has fallen about 43 percent from its high of USD 107.73 in June.

Over the next four to five years, China will experience deflation and sluggish demand, Xie said. Consumption will remain healthy, he added, with households continuing to spend and exports performing well.

As a result, Xie sees the China story hitting raw material and equipment providers such as Australia, Japan and Germany, while consumer products providers like France and Switzerland will feel much less impact.

The low-oil price market will also be a boon to the United States economy, with each sustainable \\$10 drop in the cost of crude adding two- to three-tenths of a percentage point to GDP, said Jeremy Zirin, chief equity strategist for Americas at UBS Wealth Management Research.

The United States is probably seeing a sustainable USD 20 to USD 30 decline in oil that could boost GDP half to three-quarters of a percentage point, he told "Squawk Box." UBS expects oil to stay in the USD 65 to USD 75 range over the next 12 months.