Source: CGTN Published: 2019-4-23
The International Monetary Fund (IMF) projected that the Asian economy will grow 5.4 percent in 2019 and in 2020. In the World Economic Outlook released on April 2019, the IMF raised its projection for China's economic growth to 6.3 percent amid continued trade talks between Beijing and Washington.
The IMF said that a U.S.-China trade deal should prove to be positive, although the final deal has yet to emerge, adding that the lower tariffs, reduced uncertainty and Chinese structural reforms would benefit global growth.
In a recent speech, Changyong Rhee, the director of Asia and Pacific Department of IMF, said Asia's economic growth will remain solid and act as an important engine for global growth. He even made a joke that the Asian economy's great performance made him have a differential role as director of Asia and Pacific region.
IMF projected the global growth will likely pick up in the second half of 2019 on an ongoing buildup of policy stimulus in China and recent improvements in global financial market sentiment.
"Someone may still hold doubt that whether Chinese economy's growth rate is relatively low, while concerning it's such a large economy and continue to grow, it's actually impressive that China alone contributes almost one-third of global growth," Rhee added.
The IMF proposed that any macroeconomic policy mix should be aimed at preventing further economic deceleration, and macroeconomic policies should become more accommodating. Other experts echoed that view, saying China would likely remain on its high-quality growth path. They added that China's monetary and fiscal policies should be more coordinated with changing circumstances in order to function in a reasonable range.
Zhao Xijun, vice dean of the School of Finance at the Renmin University of China, told CGTN that he agrees with the IMF's suggestions, as monetary policy should be data-dependent and ensure inflation remains on track toward the central bank's target. Fiscal policy should also strike a balance between supporting demand and ensuring sustainability. China's ongoing structural reforms and policy stimulus would help the country remain on a sustainable, high-quality path.
Hua Changchun, the global chief economist of Guotai Juan Securities, also mentioned this aspect during an interview with CGTN, saying all the policies should be coordinated and consistent, and both fiscal and monetary policies should be implemented in a gradual way to help stabilize the aggregate demand.
Just as the annual Central Economic Work Conference reiterated, China will keep its prudent monetary policy "neither too tight nor too loose" while maintaining market liquidity at a reasonably ample level in 2019. Hua predicted that the next step for authorities would focus on adjusting credit structure after Q1's robust M2 and loan data.
Zhao Xijun is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.