China’s economic performance gets positive marks from IMF, despite threat of trade war fallout
Still, the International Monetary Fund urged China to resolve trade hostilities through ‘established mechanisms’
Tariffs imposed by the Trump administration on Chinese imports are likely to have “limited direct impact” on China’s economy, according to a report issued by the International Monetary Fund on Thursday.
Released just a day after Chinese President Xi Jinping warned that there would be “no winners” in a trade war during his remarks at the BRICS summit meeting in South Africa, the IMF’s annual “Article IV” consultative report offers a generally positive picture of China’s economic performance along with optimistic predictions of continuing development.
According to the 120-page document, published after IMF talks with Chinese officials in May, last year saw GDP growth of 6.9 per cent, a 0.2 per cent increase from 2016 and the first uptick in economic growth since 2010. The report also highlighted signs of success in Beijing’s efforts to change financial regulation, reduce overcapacity and combat pollution.
Yet with all eyes on the deepening trade rift with Washington, the IMF was tentative in its predictions about the economic fallout for the world’s second largest economy.
The 25 per cent tariff on US$50 billion worth of Chinese imports announced several months ago – US$34 billion of which have already been put in place – would account for just 0.4 per cent of China’s GDP, the report states. Further duties on US$200 billion in goods threatened by Trump in early July would translate to 1.7 per cent.