Chinanews.com, March 4th (Zhongxin Finance Gong Hongyu) "The rapid rebound of China's economy will have a huge boost to the overall economic recovery in the Asia-Pacific region."

  On March 3, Krishna Srinivasan, director of the Asia Pacific Department of the International Monetary Fund (IMF), said so at the International Financial Forum (IFF) online global economic high-end dialogue.

Photo provided by the organizer

  According to the IMF's assessment, every 1% growth of China's economy will drive the Asian economy as a whole to grow by 0.3%.

"China is an important trading partner for most countries in the region, and Chinese tourism helps boost economic growth in countries like Thailand and Vietnam."

  Srinivasan said that after China optimized and adjusted its epidemic prevention and control measures, it has significantly improved the overall liquidity and consumption performance in the Asia-Pacific region.

Recent economic indicators show that China's manufacturing and service industries have begun to expand, and these are strong signs of China's economic recovery.

  "Because of the rapid rebound of China's economy, the IMF has adjusted its forecast for the overall recovery time of China's economy. The IMF believes that China will usher in an overall economic recovery in the first half of this year. Previously, the IMF predicted that China's economic recovery will be in the second half of 2023. ’ said Srinivasan.

  Srinivasan believes that a moderately loose monetary policy will benefit the Chinese economy that has just started to recover.

China's ever-strengthening social security system will also help unleash the consumption capacity of the Chinese market and promote China's transformation from investment-led growth to consumption-led growth.

  At the end of January 2023, the IMF raised China's economic growth forecast by 0.8% to 5.2%, and simultaneously raised the economic growth forecast for the Asia-Pacific region to 5.3%.

  Srinivasan said that the IMF predicts that Asian countries will contribute more than 70% of global economic growth this year, and China and India alone will contribute half of this year's global economic growth.

The economic outlook for Asia-Pacific in 2023 is brighter as inflation eases in the region, commodity prices fall, and Asian currencies recover in value against the U.S. dollar.

  At the same time, Srinivasan said that despite the huge support of China's economic rebound, the overall recovery of the Asian market still faces strong resistance.

He suggested that economic risks in Asia include continued growth in debt levels in various countries, as well as countries underestimating the negative effects of the Fed's continued tightening policies.

"Underestimating the negative impact of Fed rate hikes risks triggering a sudden revaluation of assets in Asian countries."

  Srinivasan also pointed out that from a global perspective, increased trade frictions and economic fragmentation have hurt Asia the most.

"In the past 30 years, globalization has benefited the Asian economy a lot, and the risk of fragmentation is the biggest unfavorable factor affecting economic growth in the Asia-Pacific region." He suggested that "Asian countries work together to maintain economic globalization, prevent economic fragmentation, and protect industries." Only in this way can the stability and growth momentum of the region be maintained." (End)