While the financial world is suffering from the economic slowdown in the world’s second largest economy, the International Monetary Fund supposes that there is no reason for panic.
Managing Director of the International Monetary Fund Christine Lagarde believes that a decline in China’s GDP growth rate will have a good effect on the global economy. She also thinks that China has not slackened its pace of growth, it has just chosen a slower and more sustainable policy that will benefit the world in a long-term prospect.
Stability in China is good news for the whole world.
"China itself has embarked on an ambitious multi-year rebalancing of its economy, toward slower and more sustainable growth. This is a positive endeavor that, in the long run, will benefit everybody," IMF Managing Director Christine Lagarde said in Paris. "In the short run, however, this transformation generates spillover effects — through trade and lower demand for commodities, and through financial channels as well," she added.
China's once-startlingly fast economic growth has slowed steadily since 2010. In 2015, it grew by 6.8 percent that is still below the target of 7%. The IMF anticipates a 6.3% expansion in 2016.
Christine Lagarde also noted that a slowdown in economic convergence between developed and developing countries was "a cause for concern." "The global community cannot afford the cost of stalled convergence, because the 85% (of countries that are 'emerging' or 'developing') matter," Lagarde said.
