The International Monetary Fund has upgraded its growth estimate for China, the upgrade follows a previous one; but this time, the IMF’s decision is mainly because of the innumerable policy support the country’s economy has been receiving. A looming concern the country faces is with the massive tech-stock sell off; both Alibaba and Tencent have managed to
It is a bizarre activity for the IMF to announce any increase or upgrade on forecasts outside their tight schedule. The world’s second largest economy has been rolling out after they announced a solid first quarter; now, hand-in-hand of their stable government, China is on set to become a global leader on their budding economy.
The International Monetary Funds upgraded China’s economic growth, the second-largest in the world, to 6.7% in this year; the IMF is a Washington-based organization had initially forecasted that the Chinese’s economy would grow by 6.5% this year they then later changed it to 6.6% last April. They also changed their 2018-2020 forecasts to 6.4%, and its 2018 growth to 6.2%.
According to IMF’s First Deputy Managing Director David Lipton, "While some near-term risks have receded, reform progress needs to accelerate to secure medium-term stability and address the risk that the current trajectory of the economy could eventually lead to a sharp adjustment," and "It is critical to start now while growth is strong and buffers sufficient to ease the transition."
Massive Tech Selloff
Two of the largest companies in the China are both tech giants; Tencent and Alibaba. There has been bearish run and a massive selloff in tech stocks all over the world; this is because of the massive pressure the overflowing stock on oil and the Fed’s latest decision to increase the interest hike in the US.
This week, China showed that the selloff was easily fended off their shore; most of its technology related stocks has been outperforming and are greatly boosting the country’s economy. The surge is spearheaded by the market’s giant Tencent, it manages to grow by 45% and boost the Hang Seng index to better heights.
Its counterpart would be the renowned tech giant Alibaba; recently the Chinese company made its way to New York’s list of top ten companies that are globally measured by market capitalization. With both of this powerhouse, many analysts are expecting that they can combat their US counterpart based on how their performance is, both internationally and their stellar progress and advancement on their domestic market.
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