Robust economy gets vote of confidence: China Daily editorial

Giving a vote of confidence in the world's second-largest economy's momentum of expansion, the International Monetary Fund raised its forecast for China's GDP growth this year to 6.3 percent on Tuesday, up from 6.2 percent in its January prediction. 

After galloping at a fast pace for about four decades, the rate of growth of the Chinese economy has started to ease in recent years, triggering concerns about whether it can maintain its role as the world's major growth engine.

China's GDP growth eased to 6.6 percent in 2018, down from 6.8 percent in 2017. While slower growth is to be expected at this stage of the country's development, to cope with the effects and give a boost to the manufacturing sector and real economy which have been facing external headwinds, the authorities have introduced a series of supportive measures, such as tax and fee cuts.

The National Bureau of Statistics is scheduled to release the data for the first quarter next week, but based on the already available economic indicators, such as the purchasing managers' index, which surged in March, there is a growing conviction that the Chinese economy has bottomed out.

It may be that the Chinese economy has said goodbye to the growth rates it has enjoyed in the past few decades, but the economic indicators suggest it can maintain a medium-fast rate of growth, with little possibility of any drastic growth meltdown. And given the size of the Chinese economy now, its relatively slower expansion is to be both expected and desired as it pursues higher quality growth.

On another positive note, the IMF's raised forecast for China's growth is also a reflection of the recent emergence of positive signs from the Sino-US trade talks. Both sides have revealed that their discussions are going well.

On Tuesday, China's Ministry of Foreign Affairs said there had been "new substantial" progress in the talks and it hoped the two sides would be able to resolve issues of mutual concern and achieve "satisfactory" results. While the White House said the meetings had been productive and progress had been made on numerous key issues.

If the talks fare as well as expected, it will bring some much needed stability to international trade and global supply chains which have been badly shaken by the trade frictions between the world's two largest economies. While revising its forecast for the Chinese economy upward, the IMF downgraded its global growth forecast to 3.3 percent, reflecting negative revisions for several major economies including the United States.

With China still rebalancing toward a private-consumption and services-based economy amid the external pressures and uncertainties, the IMF's forecast once again highlights the resilience of the Chinese economy.