U.S., WASHINGTON, April 16. China is straying from traditional growth engine, said Tobias Adrian, Financial Counselor and Director, Monetary and Capital Markets Department, IMF during a briefing on the Global Financial Stability Report held as part of the IMF Spring Meetings in Washington, Trend reports.
"The most recent GDP figure in China was above expectation last year. For the whole year the GDP growth was also above 5%. So, the overall growth rate remains very strong. Investment in the property sector has been an engine of growth for China for many years. And there is a marked slowdown in property investment, in particular, when you look at new construction in housing that has dropped very sharply. And that is certainly a transition in terms of the growth model that authorities are very focused on," he said.
The second aspect, as Adrian said, is about the valuation of housing prices.
"We have seen a decline in housing prices, they fairly moderate to date. And that is certainly a strength from a financial stability perspective. Housing investment is the biggest asset for most households. And of course, banks have exposure to the housing market as well. So, while there has been a decline in housing prices, it has not been extremely sharp. In terms of assessing financial sector stability, it's very important to consider the regional heterogeneity of housing markets. There are some major cities that continue to perform very strongly from a housing perspective, while other provinces are somewhat weaker. We certainly see also this regional disparity in terms of the banking sector, so some of the smaller banks and some of the weaker provinces are more impacted, than, say, banks in the stronger provinces," he added.
The Spring Meetings of the International Monetary Fund and the World Bank Group kicked off on April 15.
The main ministerial meetings and events will take place April 17-19 with other events and activities taking place during the week, April 15-20.
At the heart of the gathering are meetings of the joint Development Committee and the IMF's International Monetary and Financial Committee, which discuss progress on the work of the World Bank Group and the IMF.
The Spring Meetings bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.