Mainland Chinese economy to escape hard landing: IMF
October 13, 2012, 12:06 am TWN
TOKYO -- The International Monetary Fund on Friday all but ruled out a hard landing for China's slowing economy, saying it would expand despite increasing headwinds from battered markets in Europe and the United States.
The fund has cut its estimate for growth in the world's second-largest economy this year, raising fears that China is running out of steam, with expansion pegged at 7.8 percent this year and 8.2 percent in 2013.
That is down from a July estimate of 8 percent and 8.5 percent growth respectively.
However, Anoop Singh, director of the IMF's Asia and Pacific department, told a Tokyo press briefing that China was not on the road to economic ruin, describing the possibility of a hard landing as “remote.”
“China is not having a hard landing. The numbers are clearly recognizing that China will grow this year,” he said at the IMF and World Bank's annual meetings in the Japanese capital.
China has suffered the knock-on effect of a severe debt crisis in Europe and a hobbled recovery in the United States, its two key export markets, which have led to a slump in trade and contraction in manufacturing activity.
Authorities have moved to spur the economy by slashing interest rates twice in quick succession this year and cutting the amount of funds that banks must keep in reserve three times since December in a bid to encourage lending.
On Thursday, the World Bank's newly installed chief said he expected Beijing to take “very aggressive” steps to kick-start its slowing economy after a once-in-a-decade leadership shuffle next month.