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Economy

China's 'inevitable' slowdown due to deleveraging: IMF economist

Rhee warns long lasting low interest rates will stress local banks

China's economic slowdown began long before the current coronavirus crisis, according to Changyong Rhee, the IMF's chief economist for the Asia-Pacific.   © Reuters

TOKYO -- As markets and supply chains dependent on China grind to a halt, the International Monetary Fund cautioned against portraying China's economic slowdown in 2019 as an unexpected consequence of the coronavirus outbreak and trade tensions.

"China's economic slowdown leads back to before the [new] coronavirus started," said Changyong Rhee, the IMF's chief economist for the Asia-Pacific. "We forecasted China's growth rate would be 6.1% in 2019 and in 2020 it would be 6.0, but actually we revised upward China's growth forecast because of the Phase One [trade] deal [with the U.S.] at the end of the year."

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