News / Asia

IMF: Sustained Strong Growth in China to Boost Asia

TEXT SIZE - +
William Ide

The International Monetary Fund, or IMF, said Monday that a broad-based economic recovery continues in Asia and that growth in the region, despite slightly lower recent performance, still outpaces the rest of the world.  IMF economists say China - the world's second largest economy after the United States - should see strong economic growth this year and that it will help boost other economies in the region.

Economists at the International Monetary Fund say growth in China is projected to be robust at 9.6 percent this year.

They note that demand in the country is shifting from the public to private sector as consumption is getting a boost from credit growth and government policies to raise household income.

IMF economist Abdul Abiad spoke Monday about the outlook for China and its impact on the rest of Asia as the IMF released of its annual World Economic Outlook report. "China does help the region and strong growth in China will continue to help the region as well," he said.

Last year, China's economy grew at a rate of 10.25 percent.  And experts predict that Chinese economic growth will remain at around 9.5 percent for the next two years.

In its report, the International Monetary Fund says that this year's export growth for Asia will be slightly lower than last year's.  And it warns that the region's reliance on exports for growth presents risks.  The report notes that although inter-Asian trade grew last year, two-thirds of the final demand for products made in Asia came from outside of the region.

The possibility of renewed turbulence in the Euro region, the report says, could affect trade with Asia.

Although the IMF says foreign investment is recovering in Asia to pre-financial crisis levels, it notes that inflation is expected to broaden, mainly in emerging and developing economies.

The IMF's Abdul Abiad says there is serious uncertainty over the economic outlook for Japan, following last month's devastating earthquake and tsunami. "There is uncertainty about the extent of the damage to capital.  The official estimate is that the damage is about three to five percent of the GDP or about the double that of the Kobe earthquake.  But there is still uncertainty around that estimate.  A second big uncertainty is the length of time it will take until both supply chain disruptions and power disruptions are resolved," he said.

Japan is the world's third largest economy and there have been concerns about the affect the earthquake could have on the regional and global economies.

Olivier Blanchard, Chief Economist at the IMF says that although advanced economies are struggling to boost growth and bring down high unemployment, emerging and developing economies such as China are struggling with inflation. "For the recovery to be sustained, advanced countries must achieve fiscal consolidation.  To do so, and to maintain growth, they need to rely on increased external demand.  Symmetrically, emerging market economies must rely less on external demand and more on domestic demand," he said.

Blanchard adds that one way for emerging countries to help rebalance the world economy is to allow undervalued currencies to appreciate faster. "Appreciation of emerging market countries' currencies relative to advanced countries' currencies is a central key to this global adjustment.  It is not the only key, but it is a central key," he said.

China's currency, the yuan, has long been a target of complaints by Western nations that say it is artificially low and gives Chinese companies an unfair trade advantage.  

In its report, the IMF says that increasing the value of the yuan would ease inflationary pressures in China and help correct global trade and fiscal imbalances.

China is expected to see five percent inflation this year, according to the IMF report, which notes that price pressures there that started in a narrow range of food products have now broadened to other sectors, including housing.

China's latest trade data shows its first quarterly trade deficit in seven years.  Some economists say Beijing might try to use the data to quiet calls to revalue the yuan.

The IMF says inflationary trends like those in China are becoming evident in other developing economies in Asia, and projects the growth of inflation in the region this year at six percent.

You May Like

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid