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IMF announced on Wednesday that China’s economy is projected to grow by 5% this year The International Monetary Fund (IMF) announced on Wednesday that China’s economy is projected to grow by 5% this year, following a robust first quarter. This is an upgrade from their previous forecast of 4.6% growth, although they anticipate a slowdown in the coming years. As Beijing intensifies its efforts to bolster an uneven recovery in the world’s second-largest economy, the IMF has updated its projections. The Chinese economy has been struggling due to a prolonged property crisis and its subsequent impact on investors, consumers, and businesses. The IMF has increased its GDP targets for 2024 and 2025 by 0.4 percentage points each. However, it cautioned that China’s growth would decelerate to 3.3% by 2029 due to an ageing population and slower productivity growth, according to Reuters. https://lnkd.in/dFq4pBH3 The IMF now predicts that China’s economy will grow by 5% in 2024 and slow down to 4.5% in 2025. Gita Gopinath, the IMF’s First Deputy Managing Director, stated in Beijing that the upgraded forecast for this year primarily reflects stronger than expected GDP growth in the first quarter and the recent announcement of additional policy measures. https://bit.ly/4bNbBej China’s faltering recovery from the COVID-19 pandemic has weighed on stock markets and the Chinese yuan, with several rounds of policy support measures yet to stimulate robust demand. Analysts believe that the ongoing crisis in the property sector is the most significant obstacle to a full economic recovery. The IMF has also issued a warning about the potential risks ahead, according to Reuters. Gopinath noted that the outlook’s risks are skewed to the downside, including from a more significant or longer-than-expected adjustment in the property sector and increasing fragmentation pressures. China announced ‘historic’ measures this month to stabilise the property market. https://bit.ly/3V1EmhE However, analysts argue that these steps are insufficient for a sustainable recovery. Picture credit: The Gulf Today #china #gdp #imf #property #exports

China's economy is set to grow 5% this year, after a "strong" first quarter, the International Monetary Fund (IMF) said on Wednesday, upgrading its earlier forecast of 4.6% expansion though it expects slower growth in the years ahead. The IMF said it had revised up both its 2024 and 2025 GDP targets by 0.4 percentage points but warned that growth in China would slow to 3.3% by 2029 due to an ageing population and slower expansion in productivity. China's economy grew at a faster than expected 5.3% pace year-on-year in the first quarter, comfortably above analysts' forecast for a 4.6% gain in a Reuters poll and up from a 5.2% expansion in the previous quarter. A string of recent economic indicators for April including factory output, trade and consumer prices suggest the $18.6 trillion economy has successfully navigated some near-term downside risks, but China observers say the jury is still out on whether the bounce is sustainable. Domestic consumption remains soft and much of that is linked to fragile confidence amid a protracted property sector crisis that is widely seen as the single biggest stumbling block to a full-blown economic recovery. Source: Reuters News Agency #china #beijing #chineseeconomy #trade #growth #development #gdp

The problems of the chinese economy now. The Economist:"China’S giant economy faces an equally giant crisis of confidence—and a growing deficit of accurate information is only making things worse. Even as the country wrestles with a property crash, the services sector slowed by one measure in August. Consumers are fed up. Multinational firms are taking money out of China at a record pace and foreign China-watchers are trimming their forecasts for economic growth".   What is the problem with China's economy? One measure of the unbalanced state of the Chinese economy is the fact that investment accounts for as much as 42 percent of GDP. That is approximately double the rate of the advanced economies and has given rise to a major problem of manufacturing excess capacity. China's financial system is highly vulnerable to the threats of falling property prices, defaults on loans and corporate bonds, tightening interbank market conditions, and capital outflows. China's financial system is highly vulnerable to the threats of falling property prices, defaults on loans and corporate bonds, tightening interbank market conditions, and capital outflows.

The International Monetary Fund (IMF) on Tuesday upgraded its economic outlook this year for China, India and Europe while modestly lowering expectations for the United States and Japan. Overall, the IMF said it still expects the world economy to grow a lackluster 3.2% this year, unchanged from its previous forecast in April and down a tick from 3.3% growth in 2023. Pierre-Olivier Gourinchas, the IMF’s chief economist, estimated that China and India would account for nearly half of global growth this year. Partly because of a surge in Chinese exports at the start of 2024, the IMF upgraded its growth forecast for China this year to 5% from the 4.6% it had projected in April, though down from 5.2% in 2023. The IMF forecast was posted before Beijing reported Monday that the Chinese economy, the world’s second-largest after the United States, had grown at a slower-than-expected 4.7% annual rate from April through June, down from 5.3% in the first three months of the year. China’s economy, which once regularly grew at a double-digit annual pace, is facing significant challenges, notably the collapse of its housing market and an aging population that is leaving the country with labor shortages. By 2029, Gourinchas wrote, China’s growth will slow to 3.3%. Source: The Associated Press

In the first quarter (Q1) of 2024, the Chinese economy began to pick up pace, demonstrating strength and resilience and adding much-needed predictability to an otherwise uncertain global economic scene. China’s GDP grew by 5.3 percent in the first three months of this year compared to the same period last year, a faster rate than the 5.2 percent growth in the preceding quarter, according to figures released by the National Bureau of Statistics (NBS).

🔴🇨🇳🇺🇸 Does China national accounting system exaggerate the size of China’s GDP❓ 🌐🔗 https://lnkd.in/gAcjDpWJ China’s national accounting under-values the so-called services economy, including things liked imputed rents, seeing services as costs rather than value creating per se. By way of contrast, services are critical to calculating the size of many western economies. In the U.S., when legal fees go up, or rents go up, GDP goes up. Hence, … .

China's economy is expected to continue struggling in 2024 due to several key factors, including declining pent-up demand, a persistent real estate slump, slowing foreign demand for Chinese products, and limited room for major stimulus. The Conference Board forecasts GDP growth to decelerate to 4.1% in 2024, down from an estimated 5.2% in 2023. This ongoing struggle reflects deeper structural issues within the economy. #ChinaEconomy #GDPGrowth #EconomicOutlook #GlobalTrade

🔴🇨🇳🇺🇸 What’s the real size of China’s economy? World Bank’s latest purchasing power parity GDP survey shows China edging up slightly on US but the measure widely misses the mark By HAN FEIZI JUNE 17, 2024 🌐🔗 https://lnkd.in/gAcjDpWJ #ChinaEconomy #ChinaEconomySize In May, the World Bank concluded one of its periodic International Comparison Program (ICP) assessments – the price survey which “officially” determines purchasing power parity GDP. The ICP is a massive undertaking. According to The Economist, World Bank researchers visited 16,000 shops in China alone to collect price data. The latest ICP assessment collected data in 2021, four years after the 2017 survey. And the conclusion is that China’s GDP was undervalued by US$1.4 trillion pushing China’s 2022 PPP GDP from 119% of the US to 125%. China’s PPP GDP is only 25% larger than that of the US? Come on people… who are we kidding? Last year, China generated twice as much electricity as the US, produced 12.6 times as much steel and 22 times as much cement. China’s shipyards accounted for over 50% of the world’s output while US production was negligible. In 2023, China produced 30.2 million vehicles, almost three times more than the 10.6 million made in the US. On the demand side, 26 million vehicles were sold in China last year, 68% more than the 15.5 million sold in the US. Chinese consumers bought 434 million smartphones, three times the 144 million sold in the US. As a country, China consumes twice as much meat and eight times as much seafood as the US. Chinese shoppers spent twice as much on luxury goods as American shoppers. In 2023, Chinese travelers took 620 million flights, 25% fewer than the 819 million flights taken by Americans, but Chinese travelers also took 3 billion trips on high-speed rail (and 685 million on traditional rail), significantly more than the 28m Amtrak trips. With the exception of luxury goods, all of the above are volume or unit measurements and need to be adjusted for quality/features to be comparable apple-to-apples. It would be highly presumptuous of us to discount the 16,000 shop visits conducted by the World Bank and accuse them of grossly lowballing China’s PPP GDP. But that is exactly what we are going to do. It is prima facie ridiculous that China’s production and consumption, at multiples of US levels, can be realistically discounted for lower quality/features to arrive at a mere 125% of US PPP GDP. .

Size matters, but it’s what you’re measuring that really matters. The IMF have updated their calculations of relative economic “size” in Purchasing Power Parity Terms. In the basis of reassessments, based on extensive field data collection, the IMF have revised up China’s economic size. It is even bigger than the U.S. economy than first thought. But it’s not just about absolute size. China’s national accounting under-values the so-called services economy, including things liked imputed rents, seeing services as costs rather than value creating per se. By way of contrast, services are critical to calculating the size of many western economies. In the U.S., when legal fees go up, or rents go up, GDP goes up. This article shows just how much larger China’s economy is, even larger than the revised estimates from the IMF. Real economy versus a Potemkin economy with an oversized financialised sector. #china #realeconomy #us

China's Economic Growth Projections for 2024 and Beyond 📈🇨🇳 China’s economy is expected to grow by 5% in 2024, according to the International Monetary Fund (IMF), which upgraded its previous forecast of 4.6%. This positive revision is driven by strong first-quarter performance and supportive policy measures. However, the IMF anticipates a gradual slowdown in growth in the coming years, projecting a decline to 3.3% by 2029 due to factors like an ageing population and slower productivity growth. 📊 Key Drivers of the Revised Forecast 1. Strong First Quarter: China’s economy grew at a 5.3% pace year-on-year in Q1, surpassing analysts’ expectations of 4.6%. This robust growth was fueled by recent policy measures aimed at stabilizing the economy. 🚀 2. Policy Measures: The IMF acknowledges steps taken to stabilize China’s property sector, which remains a significant challenge. These measures are seen as crucial for steering the sector towards a more sustainable path. 🏢 Future Challenges and Concerns - Domestic Consumption: Despite the strong start, domestic consumption remains weak due to fragile consumer confidence, partly stemming from a prolonged property sector crisis. 🛍️ - Retail and Housing: Retail sales growth in April was the slowest since December 2022, and new home prices fell at their fastest rate in nine years, indicating ongoing struggles in these sectors. 🏠 What It Means for You: Understanding China’s economic trajectory can offer valuable insights for personal and business financial planning. Here are three key takeaways: 1. Global Market Impact: China's economic health significantly influences global markets. Stay informed about these trends to make better investment decisions. 🌐📉 2. Investment Opportunities: With China’s policy measures focusing on stability, consider exploring investment opportunities in sectors likely to benefit from these interventions. 💼💡 3. Risk Management: The projected slowdown underscores the importance of diversified investments to mitigate risks associated with economic fluctuations. 🔍📊 How I Can Help: As a Certified Financial Planner™ (CFP), I can assist you in navigating these economic insights to optimize your financial strategies. Whether you are looking to adjust your investment portfolio, manage risks, or plan for future financial stability, I am here to help you achieve your financial goals with tailored advice. Let’s work together to secure your financial future amidst these global economic shifts. 🌟📈 Daniel Tay CFP, IBFA #EconomicGrowth #FinancialPlanning #ChinaEconomy #Investment #GlobalMarkets #FinancialStability https://lnkd.in/gQ7K8MAF