Archive for ‘IMF’

18/05/2019

IMF’s Lagarde says U.S.-China trade war could be risk for world economic outlook

TASHKENT (Reuters) – The trade war between the United States and China could be a risk to the world economic outlook if it is not resolved, International Monetary Fund Managing Director Christine Lagarde told Reuters on Friday during a visit to Uzbekistan.

“Obviously, the downside risk that we have is continued trade tensions between the United States and China,” Lagarde said, referring to the IMF’s world economic outlook.

“And if these tensions are not resolved, that clearly is a risk going forward.”

The IMF last month cut its growth forecast for 2019 to 3.3%, down from the 3.5% it had previously predicted.

It warned at the time that growth could slow further due to trade tensions and a potentially disorderly British exit from the European Union.

“But we expect that at the end of 2019 and in 2020 it will bounce back,” Lagarde said of the world economic outlook on Friday.

The United States infuriated China this week when it announced it was putting Huawei Technologies Co Ltd, the world’s biggest telecoms equipment maker, on a blacklist that could make it hard to do business with U.S. companies.

On Friday Beijing suggested a resumption of talks between the world’s two largest economies would be meaningless unless Washington changes course.

Source: Reuters

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10/04/2019

IMF revises up China’s growth forecast for 2019 to 6.3 pct

WASHINGTON, April 9 (Xinhua) — The International Monetary Fund (IMF) on Tuesday revised up the 2019 growth projection for China to 6.3 percent, up 0.1 percentage point from its previous estimation in January, according to the newly released April 2019 World Economic Outlook (WEO).

The upward revision reflected the combined impact of recent developments in the China-U.S. trade talks, China’s stronger-than-expected expansionary fiscal policy, and a slowing global economy, Changyong Rhee, director of the IMF’s Asia and Pacific Department, told Xinhua.

“We have to revise our growth forecast due to more fiscal expansion, at the same time, the global economy has started to slow down, that actually has negative impact on that,” Rhee said, adding that the IMF made the latest projection taking into account both positive and negative factors.

In its latest annual government work report, China set the 2019 gross domestic product (GDP) growth target at 6-6.5 percent. The world’s second-largest economy also pledges to continue pursuing high-quality development.

The IMF’s medium-term forecast sees a gradual slowdown in China “as internal rebalancing toward a private-consumption and services-based economy continues and regulatory tightening slows the accumulation of debt and associated vulnerabilities.”

In the latest WEO report, it projected a 6.1 percent growth rate for China in 2020, slightly down from the previous estimation of 6.2 percent.

The report highlighted trade tensions as one of the key sources of downside risk to the global outlook, noting that raising tariffs would lead to higher prices for consumers, and trade policy uncertainty would reduce business investment, disrupt supply chains, and dampen productivity growth.

Source: Xinhua

26/02/2019

Trump: US and China ‘very very close’ on deal

US President Donald Trump addresses US governors at the White HouseImage copyrightAFP

President Donald Trump has said that the US and China are “very very close” to signing a trade agreement, potentially ending the long-running feud between the two countries.

Mr Trump told US governors on Monday that both nations “are going to have a signing summit”.

“Hopefully, we can get that completed. But we’re getting very, very close,” he said.

It follows a decision to delay imposing further trade tariffs on Chinese goods.

At the weekend, Mr Trump said both sides had made “substantial progress” in trade talks following a summit in Washington last week.

The rise in import duties on Chinese goods from 10% to 25% was due to come into effect on 1 March.

Instead, Mr Trump said the US is now planning a summit with Chinese Premier Xi Jinping at the US President’s Mar-a-Lago resort in Florida.

US shares rose on the decision to delay tariffs, with the Dow Jones Industrial Average closing 0.23% higher at 26,091.9.

The S&P 500 and the Nasdaq also finished trading in positive territory.

As he prepared to meet North Korean leader Kim Jong-un in Vietnam, Mr Trump also tweeted that a China trade deal was in “advanced stages”.

Mr Trump’s decision to delay tariff increases on $200bn (£153bn) worth of Chinese goods was seen as a sign that the two sides were moving ahead in settling their damaging trade war.

Last week, Mr Trump noted progress in the latest round of negotiations in Washington, including an agreement on currency manipulation, though no details were disclosed.

Sources told CNBC on Friday that China had committed to buying up to $1.2 trillion in US goods, but there had been no progress on the intellectual property issues.

Donald Trump and China's Vice Premier Liu He in the Oval OfficeImage copyrightAFP
Image captionPresident Trump met China’s Vice Premier Liu He on Friday

Gregory Daco, chief US economist at Oxford Economics, said: “We had anticipated such a delay and believe a handshake agreement in which China will promise to import more agricultural products, work towards a stable currency and reinforce intellectual property rights protection will be achieved in the coming weeks.

“However, we don’t foresee a significant rollback of existing tariffs, and see underlying tensions regarding China’s strategic ambitions, its industrial policy, technological transfers and ‘verification and enforcement’ mechanisms remaining in place.”

What has happened in the trade war so far?

Mr Trump initiated the trade war over complaints of unfair Chinese trading practices.

That included accusing China of stealing intellectual property from American firms, forcing them to transfer technology to China.

The US has imposed tariffs on $250bn worth of Chinese goods, and China has retaliated by imposing duties on $110bn of US products.

Mr Trump has also threatened further tariffs on an additional $267bn worth of Chinese products – which would see virtually all of Chinese imports into the US become subject to duties.

US and China's tariffs against each other

The trade dispute has unnerved financial markets, risks raising costs for American companies and is adding pressure to a Chinese economy that is already showing signs of strain.

It has also stoked fears about the impact on the global economy.

Last year, the International Monetary Fund warned the trade war between the US and China risked making the world a “poorer and more dangerous place”.

Source: The BBC

01/12/2015

Boost for China as it joins IMF elite – FT.com

The IMF on Monday gave a major vote of confidence to China and its reform efforts, giving the renminbi greater weighting than the yen or pound as it included the currency in its elite basket of reserve currencies.

Chinese one-hundred yuan banknotes are stacked for a photograph at the Korea Exchange Bank headquarters in Seoul, South Korea, on Thursday, Feb. 27, 2014. Photographer: SeongJoon Cho/Bloomberg

The vote by the board to make the renminbi the fifth currency in the basket used to value the IMF’s own de facto currency followed months of deliberation at the fund and years of lobbying by a Beijing eager for the recognition.

“The Rmb’s elevation to the club of elite global reserve currencies is a big step for China and a significant one for the international monetary system,” said Eswar Prasad, professor of economics at Cornell University and a former IMF China mission chief.

The renminbi will become the third biggest currency in the “special drawing rights” basket when it takes effect on October 1. The move is largely symbolic but Christine Lagarde, IMF managing director, called it a “milestone” in China’s economic reform “journey” and its integration into the global financial system.

Following the move the currency slipped 0.19 per cent to Rmb6.4374 against the dollar in offshore trading in Hong Kong.

The People’s Bank of China set its daily “fix” — the onshore rate around which the currency can trade 2 per cent either side — at Rmb6.3973 per dollar, its fourth consecutive slightly weaker rate.

Investors generally expect China to allow its currency to weaken gradually but few see much likelihood of a repeat of its 3 per cent August devaluation, which sent shockwaves through global markets.

Source: Boost for China as it joins IMF elite – FT.com

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