Risks tilted to the downside amid trade uncertainty
The IMF is out with its annual report on China. They say:
- risks are tilted to the downside amid trade uncertainty
- China should maintain flexible yuan if tariffs rise
- China could intervene to support one in adverse scenario
- China GDP growth could slowed to 4% by 2030
- escalating trade tensions could warrant China stimulus
- China augmented government debt to top 100% of GDP in 2024
- The yuan is not significantly overvalued or undervalued. In line with fundamentals
- IMF has been pressing China for more exchange-rate flexibility, less intervention in currency markets
- China should open up more sectors to foreign competition to put its economy in best position to deal with trade pressures
