China has achieved a "soft landing" in its economic slowdown, the IMF says while cautioning that more sweeping reforms are needed to ensure healthy growth in the longer term.
In a report Wednesday on its website, the IMF praised China's leaders for adjusting policies to help counter the malaise plaguing the global economy that has also slowed robust growth in China and other emerging nations. "China's economy seems to be undergoing a soft landing, though global headwinds are increasing," said the report, issued after IMF consultations with Beijing.
It notes that China has reduced some imbalances in the world's second-biggest economy, such as its once huge trade surplus, and brought inflation under control. But it pointed to risks from excessive bank lending and urged more effective regulation to ensure financial stability. "Overall we are very confident that China is experiencing what we would call a soft landing," Markus Rodlauer, deputy director of the IMF's Asia & Pacific Department, said in a video interview. "This means growth of about 8 percent. This is less than it was in the past but still it compares very favorably to what is happening around us," he said. China's second-quarter growth fell to a three-year low of 7.6 percent as exports, consumer spending and factory output weakened. Analysts say a rebound might begin in the second half but could take longer to take root and be weaker than previously expected.