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IMF's Latest View on China

Professor of Financial Economics and Part-time Value Investor, Transfin.
Aug 21, 2017 4:30 AM 2 min read
Editorial

IMF released its outlook on the Chinese economy this month post an annual bilateral exchange. Kicking-off our series on the six key conclusions with:

#1 IMF takes a positive view of Chinese GDP on the back of the govt's expansionary macroeconomic policy and increased stimulus

 

#2 Chinese debt remains a concern potentially posing as a headwind against medium term growth

 

#3 Chinese govt on a path towards deleveraging to narrow the large "credit gap"

 

#4 China's high savings culture which protects it against systemic shocks, also mutes consumption and growth

 

#5 Significant scope to increase govt spending on education, pensions, and health, to boost consumption and bring China in-line with Developed nations

 

#6 Capital allocation should move away from low ROCE firms to increase growth potential