China economic growth prospects gain momentum following trade war deal, but scepticism remains

Recently agreed phase one trade deal could boost China’s GDP growth for 2020 to about 6 per cent, says the International Monetary Fund (IMF)

A growing number of forecasts are upbeat about China’s growth prospects, though scepticism remains amid an economic slowdown

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IMF managing director Kristalina Georgieva says the US-China trade deal is a positive step for the economies of both countries. Photo: AFP

Published: 6:00pm, 18 Dec 2019Updated: 10:18pm, 18 Dec 2019

A growing number of forecasts for Chinese economic growth next year are upbeat after Beijing reached a phase one trade deal with Washington last week, though some analysts say domestic headwinds will continue to weigh on the economy.

The International Monetary Fund (IMF) is the latest to voice optimism about growth prospects, with managing director Kristalina Georgieva saying the bilateral agreement that will halt the introduction of new tariffs and lower some already in place could boost expansion to about 6 per cent next year, up from its October projection of 5.8 per cent.

Georgieva applauded the just-concluded trade deal as a “very positive step” for both countries and the global economy, but called for continued discussions on broader policy issues.

“To sustain the positive impact for the world, we need to go from trade truce to trade peace,” the Bulgarian economist was quoted as saying in an interview with Chinese business magazine Caixin on Monday.

To sustain the positive impact for the world, we need to go from trade truce to trade peace,

Kristalina Georgieva

An official upgrade of the IMF forecast is expected to be announced in mid-January when the Washington-based institution releases its updated World Economic Outlook.

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