China worried by US monetary policy, decoupling, but Beijing shares optimistic economic growth outlook with IMF

Chinese officials, the private sector and academia spoke with the International Monetary Fund (IMF) last year as part of the annual Article IV consultation

Earlier this week, the IMF downgraded China’s 2022 growth estimate to 4.8 per cent from the 5.6 per cent expansion predicted in October

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In its quarterly “World Economic Outlook” released earlier this week, the IMF downgraded China’s 2022 growth estimate to 4.8 per cent from the 5.6 per cent expansion predicted in October. Photo: Xinhua

Published: 4:00pm, 28 Jan 2022Updated: 5:12pm, 28 Jan 2022

A health check of China’s economic and financial systems by a leading international organisation has revealed Beijing has admitted being concerned about external risks such as US monetary policy tightening and decoupling, but remains optimistic about China’s economic growth prospects this year.

While acknowledging the impact of its zero-Covid strategy on its biggest growth drivers, officials are more concerned about how the global recovery has been damaged by renewed coronavirus outbreaks, shortages of key components and shipping bottlenecks, according to a report released by the International Monetary Fund (IMF) on Friday.

China’s economic recovery has slowed, the Washington-based organisation said, and remains unbalanced and subject to risks, while it called for continued supportive policies and progress in key structural reforms.

“China’s recovery is well advanced, but it lacks balance and momentum has slowed,” the report said, pointing to the rapid withdrawal of policy support, the lagging recovery of consumption and slowing real estate investment as major factors.

The comments were made during the annual Article IV consultation between the IMF, Chinese officials, the private sector and academia from October 28 to November 10.