IMF says China has room for more stimulus (刺激计划第二轮？)
(Bloomberg) – China, the world’s fastest-growing major economy, has scope for more government spending to counter rising unemployment, the International Monetary Fund said.
A low level of public debt leaves room to expand a 4 trillion yuan ($586 billion) spending package, according to the executive directors at the Washington-based IMF, which has shored up economies from Iceland to Pakistan in the past year. Officials differed over how to label China’s currency, which U.S. lawmakers call artificially undervalued.
The IMF’s assessment in a report released yesterday contrasts with that of the World Bank, which last month advised China to delay until 2010 any additional spending. China’s economic growth has accelerated because of record lending in the first half of the year and the central bank has stepped up bill sales to avert bubbles in stocks and property.
“China should consider an additional stimulus package if there’s another major external shock,” said Wang Qing, chief Asia economist for Morgan Stanley in Hong Kong. “In the event of a further slowdown or the global economy turning weaker again, the government has room to do more.”
Unemployment is projected to rise to an annual average of 4.4 percent for 2009, from 4.1 percent last year, the report said. China’s official urban jobless rate, which understates unemployment because it excludes millions of migrant workers, was 4.3 percent in the first quarter.
Economic growth will slow to 7.5 percent this year from 9 percent in 2008, the IMF said.
“Directors were of the view that fiscal support should be maintained in 2010,” the fund said in its first executive-level report on China in three years. “Directors recognized that, over the near term, rebalancing the economy could raise unemployment as jobs are shed in export-oriented sectors.”
IMF directors “generally saw further room for a targeted, additional stimulus aimed at increasing private consumption through near-term fiscal measures to raise household income,” the report said.
China needs “more growth in internal private consumption,” Stephen Roach, chairman of Morgan Stanley Asia, said in an interview with Bloomberg Television in Hong Kong today.
The dispute among the directors over China’s currency stance comes a week before the first gathering of top American and Chinese economic officials since President Barack Obama took office in January.
Some directors considered the yuan “substantially undervalued,” and others pointed to “the methodological difficulties of making exchange-rate assessments.”
China has stalled the appreciation of the yuan against the dollar for the past year after the 21 percent gain that followed the scrapping of a fixed exchange rate in July 2005.
The currency traded at 6.8307 against the dollar as of 11:26 a.m. in Shanghai today.
The IMF’s annual country assessments, called Article IV Consultations, typically include talks with government and central-bank officials, private investors, labor representatives, lawmakers and civic organizations. While the fund sent missions to China in recent years, no executive-level report has been published since 2006.
Previous assessments weren’t published due to disagreement over how to describe China’s currency policy. The IMF said July 2 that it would no longer use the term “fundamental misalignment” in describing currencies, to promote better cooperation with member states.
A study by the Washington-based Peterson Institute for International Economics said this week that the yuan remains undervalued and authorities should keep pursuing a more flexible currency policy during the global economic slowdown.
The Chinese currency is worth 15 percent to 25 percent less than it should when measured against major currencies after adjusting for inflation, said senior fellows Morris Goldstein and Nicholas Lardy.