Rebalancing to make China’s economy more sustainable – IMF

While the slowdown in China has had an adverse impact on commodity prices, there are other sectors which have benefitted as the world’s second-biggest economy rebalances, the International Monetary Fund (IMF) said in its latest regional outlook for Asia.

“China’s slowdown has an impact on global commodity prices, contributing in particular to a large drop in prices of some metals. At the same time, demand for some foodstuff has increased as a result of rebalancing in China, as changes in consumers’ tastes have tended to favour higher-quality and higher-protein items, and Chinese tourism continues to grow,” an IMF statement said.

The analysis shows that the impact of China’s rebalancing will depend on each country’s specific exposure to China’s economy, it added.

The report said that economies that rely on China’s consumers can be winners, while those more dependent on investment and manufacturing could lose in the near term. Over time, however, the region is likely to benefit as the rebalancing makes China’s growth model more sustainable, the report said.

 

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