Theme: China outlook
The IMF on Tuesday concluded its 2018 Article IV mission to China and released the end-of-mission press release .
The IMF assessment of China is quite positive in relation both to the growth outlook and reforms . According to the IMF the Chinese economy is performing well and reforms are progressing in several key areas such as financial de-risking and reducing overcapacity. The IMF also welcomes the shift in Chinas strategy from high-speed to high-quality growth.
On trade and opening up, the IMF says China should continue to open up and address the distortions in cross-border trade and investments.
In terms of growth forecasts, the IMF looks for a moderate decline to 6.6% in 2018 from 6.9% in 2017 followed by a moderate decline towards 5½% by 2023.
Some quotes from the press release:
'T he Chinese economy is performing well and reforms are making good progress'
'Reforms progressed in several key areas: financial sector de-risking accelerated, with a wide range of decisive measures adopted; credit growth slowed; overcapacity reduction progressed; anti-pollution efforts intensified; and opening up continued'
'Given China's record of successful reforms in the past decades, and the authorities''strong commitment and determination, we are confident that China will rebalance to a sustainable growth model. We wish them the best of success in their efforts'
'To be an effective and credible leader of better globalization, China should continue to address the distortions that still beset its economy and affect cross-border trade and investment'
Our view
We agree with the broadly constructive view. While China has many challenges, the Chinese leadership has made strong efforts to address these through a focus on deepening reforms, reducing overcapacity - and not least fighting financial risks. Deleveraging of the corporate sector and a crack-down on shadow banking should reduce the financial fragility. We expect China to continue these efforts in the coming years.
To read the entire report Please click on the pdf File Below: