In its latest update to its World Economic Outlook released in April, the IMF said China’s near-term outlook has improved since its “benchmark lending rates were cut five times in 2015, fiscal policy turned expansionary in the second half of the year, infrastructure spending picked up, and credit growth accelerated.” The forecast makes China one of the fastest-growing major economies. The IMF said the country’s growth could be 6.2 percent year-on-year in 2017. Despite the IMF’s upward adjustment, analysts said China still faces numerous challenges as it tries to anchor growth in the second half.

“In the second half, China faces some difficulties as it tries to achieve the whole-year growth target of 6.5 to 7 percent,” said Beijing think-tank China Silk Road iValley Research Institute’s chief economist Liang Haiming.

China’s exports will be affected by the fragile global economic and trade growth, making it hard for China’s export growth to pick up in the coming months, he said. Investment, meanwhile, may remain sluggish due to the country’s overcapacity reduction drive and economic restructuring, he said, adding that the rising labour and environmental costs may also keep investors away.

APMEN Sept 2016, News