CHINA ECONOMY WATCH

Hello Wednesday! Yeay, we’re in the middle of the week (again)! Today, I’m writing an article about China Economy watch based on one of my favorite economic figures: Christine Lagarde, the head of IMF.

Here is the review…

“I would say that it’s a recovery that is decelerating a bit, and we are seeing massive transitions at the moment” she said and it was expected to gain momentum next year.

After such a massive growth over decades, China’s economy slowed to 7.4% last year. The government has said it expected growth to slow even further to about 7% this year. On the other hand, the IMF has forecast growth of just 6.8%.

Ms Lagarde said that changes around the world were producing new situations, including emerging market economies having to cope with much lower commodity prices. She added “Whether you look at China transitioning from one growth model to the other, from one exchange currency method to another … we are having to adjust as a result.“

The IMF is very supportive on China’s efforts to shift from an export-led economy to a consumer-led one.

She noted China’s efforts towards better management of its currency exchange rate and interest rates movements and expected the country’s government to better communicate to the world what was going on in its economy “over the course of time”.

“You don’t move just overnight from being heavily controlled to being market determined, with massive market expectations that suddenly the situation should be the same across the world, it just doesn’t happen that way”, Ms Lagarde said.