It may come as no surprise that the IMF decided to downgrade its growth outlook for China. The revision was driven by weak global economic conditions and unsatisfactory results recorded in China as well. Indeed, the IMF is concerned about the economic recovery in China and it believes that the country’s authorities should introduce essential reforms aimed at bringing a sustainable recovery.
Apparently, signs of the China’s economic recovery are weakening as the latest flash manufacturing PMI showed that factory activity slumped significantly in May. Data released by HSBC Holdings Plc indicated that the economic growth of the world’s second economy was visibly slackening in the second quarter of the year. It seems that bad days are gathering over China’s manufacturing.
The latest data on the China’s economy saddened analysts as figures showed that GDP growth in the first quarter of the year was lower than initially anticipated. Economists ask themselves whether that means that global expansion is slowing down.
According to the new study by the OECD, China will witness economic growth of 8.5 percent in 2013. To secure its economic growth, Chinese authorities should be more focused on crucial reforms in several areas. If China secures the rate of economic growth, it will replace the United States as the world’s largest economy in 2016.
Newest data showed that China’s economic growth in the fourth quarter sped up for the first time in two years, but 2012 growth was the weakest in 13 years. It seems that the uncertain economic outlook might force the government to support further growth.
On the 14th of December, HSBC Holding Plc informed that the initial China manufacturing grew to 50.9 in December. The results of the HSBC survey show that the world’s second economy is on the track to recovery despite the fact that the country is facing external weaknesses. The growth, which was seen in new orders and employment, means that China may expect better days. In addition, the China PMI suggests that the country will be able to resist an evident slowdown in exports.
China’s economic growth slowed in the third quarter ended in September, missing the government’s target. Data showed that China’s economy fell to the lowest level in over three years, yet retail sales and other activity accelerated and it is viewed as the sign of recovery.
The share market on the 9th of October saw an Asian shares rise, but was still topped by the concerns over the prospects of global growth. These concerns were based mainly on the expectedly weak U.S. corporate earnings and a slump in China’s economic growth, which is the second largest in the world.