The IMF trimmed its forecasts for economic growth in China and said the trade dispute with the US is tilting the balance of risks to the downside.
The world’s second-largest economy is forecast to expand by 6.2 percent this year and 6 percent next year, down 0.1 percentage points from the previous estimate in both cases, the fund said at a briefing in Beijing yesterday.
“China and its partners should work constructively to address shortcomings in the trading system,” the fund said in a release on the completion of its annual Article IV mission to China.
Photo: Reuters
At the same time, the IMF said that no further policy stimulus would be needed to support the domestic economy, “provided there are no further increases in tariffs or a significant slowdown in growth.”
China’s economy is undergoing a domestic deceleration and rising tensions with the US, which is raising tariffs on Chinese exports and looking to cut off companies such as Huawei Technologies Co (華為) from the US market.
Chinese President Xi Jinping (習近平) this week said that output is stabilizing and has improved noticeably, the latest in a series of official statements talking up the strength and resilience of the economy.
US Secretary of the Treasury Steven Mnuchin is to meet with the People’s Bank of China (PBOC) Governor Yi Gang (易綱) during the G20 gathering of finance ministers and central bankers in Japan over the weekend, the US Department of Treasury said on Tuesday night.
The IMF’s forecast compares with the median estimate among economists surveyed by Bloomberg of 6.3 percent expansion this year and 6 percent for next year.
The economy showed an across-the-broad slowdown last month and that trend is likely to be carried into the coming months.
The PBOC has maintained its policy of targeted stimulus and fiscal policy has been stepped up.
The IMF said that while China has made progress on reforms, it should allow market forces to play a more decisive role and accelerate its opening up to the rest of the world.
China’s top banking regulatory agency last month announced new measures to open up its financial services industry to foreign investors and Yi earlier this year said the bank would focus on developing more hedging tools to help foreign investors manage risks.
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